THE UNITED REPUBLIC OF TANZANIA - mof.go.tz

THE UNITED REPUBLIC OF TANZANIA

2012 GENERAL BUDGET SUPPORT

ANNUAL REVIEW

19th

November 2012

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TABLE OF CONTENTS

TABLE OF CONTENTS ......................................................................................................... I

LIST OF ABBREVIATIONS ................................................................................................... II

EXECUTIVE SUMMARY ..................................................................................................... IV

1.0 LAUNCH OF THE 2012 GBS ANNUAL REVIEW ........................................................... 6

1.1 INTRODUCTION .............................................................................................................................. 6

1.2 WELCOMING REMARKS BY THE PERMANENT SECRETARY OF MINISTRY OF FINANCE .................... 6

1.3 REMARKS BY GBS CO-CHAIR ......................................................................................................... 6

1.4 OPENING REMARKS BY THE MINISTER OF FINANCE ....................................................................... 8

2.0 PRESENTATIONS AND DELIBERATIONS .................................................................. 11

2.1 PAF 2012 IMPLEMENTATION AND 2013 PAF OVERVIEW ........................................................ 11

2.1.1 Presentation: 2012 PAF Implementation and 2013 PAF Overview .................. 11

2.1.2 PLENARY DISCUSSION .............................................................................................................. 14

2.2 NEW BUDGET CYCLE AND RAPID BUDGET ANALYSIS................................................................... 15

2.2.1 Presentation- New Budget Cycle and Rapid Budget Analysis ............................. 15

2.2.2 Presentation- New Budget Cycle ................................................................................ 15

2.2.3 Presentation - Rapid Budget Analysis ........................................................................ 16

2.2.4 Comments by Government........................................................................................... 17

2.2.5 Presentation by the Commissioner, Budget ............................................................. 17

2.2.6 Plenary Discussion ........................................................................................................... 19

2.3 BIG FAST RESULTS NOW.............................................................................................................. 20

2.3.1 Presentation: Big Fast Results Now ........................................................................... 20


2.4 GBS INDEPENDENT EVALUATION PRELIMINARY FINDINGS ......................................................... 24

2.4.1 Presentation: GBS Preliminary Findings .................................................................... 24


3.0 CLOSING REMARKS .............................................................................................. 30

3.1 CLOSING REMARKS BY GBS CO-CHAIR ........................................................................................ 30

3.2 CLOSING REMARKS BY MINSTER FOR FOREIGN AFFAIRS AND INTERNATIONAL CO-OPERATION .. 31

ANNEXES ........................................................................................................................ 32

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LIST OF ABBREVIATIONS

ANPD Annual National Policy Dialogue

ASDP Agricultural Sector Development Program

BFRN Big Fast Results Now

BG Budget Guidelines

BMS Block Management System

CAG Controller and Auditor General

CSO Civil Society Organisation

CWG Cluster Working Group

DADPs District Agricultural Development Plans

DP Development Partner

EFD Electronic Fiscal Device

FYDP Five Year Development Plan

GBS General Budget Support

GDP Gross Domestic Product

HBS Household Budget Survey

IFMS Integrated Financial Management System

IPSAS International Public Sector Accounting Standards

JAST Joint Assistance Strategy for Tanzania

KPA Key Policy Area

KPI Key Performance Indicators

KRA Key Results Area

LGAs Local Government Authorities

LGRP Local Government Reform Program

LSRP Legal Sector Reform Program

LTPP Long Term Perspective Plan

M&E Monitoring and Evaluation

MDAs Ministries, Departments, and Agencies

MDGs Millennium Development Goals

MKUKUTA Mkakati wa Kukuza Uchumi na Kupunguza Umasikini Tanzania

MKUZA Mkakati wa Kukuza Uchumi na Kupunguza Umaskini Zanzibar

MoF Ministry of Finance

NGO Non-governmental organization

NKRA National Key Results Areas

NPS National Panel Survey

NSGRP National Strategy for Growth and Reduction of Poverty

OI Outcome Indicator

PCCB Prevention and Combating of Corruption Bureau

PER Public Expenditure Review

PFM Public Finance Management

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PFMRP Public Financial Management Reform Program

PFMS Public Financial Management System

PMO Prime Minister’s Office

PMO-RALG Prime Minister’s Office – Regional Administration and Local

Government

PMS Poverty Monitoring System

PSRP Public Service Reform Program

RGZ Revolutionary Government of Zanzibar

TDV Tanzania Development Vision 2025

TPA Temporary Process Action

URT United Republic of Tanzania

VAT Value Added Tax

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EXECUTIVE SUMMARY

The 2012 General Budget Support (GBS) Annual Review meeting marking the end

of the 2012 GBS annual review cycle was on the 19th November, 2012 at the

National College of Tourism. The meeting brought together the Government of the

United Republic of Tanzania and its 12 Development Partners providing GBS. The

Development Partner’s GBS Group is made up of 9 Bilateral Development Partners

(Canada, Denmark, Finland, Germany, Ireland, Japan, Norway, Sweden and the

United Kingdom), and 3 Multilateral Development Partners (African Development

Bank, the World Bank and the European Commission).

The objective of the annual review is to assess the Government and GBS Partners

performance against their respective commitments as agreed in the Partnership

Framework Memorandum [2011- 2016] and the Performance Assessment

Framework (PAF). It provided an opportunity to receive presentations and discuss

key issues namely: the New Budget Cycle, Rapid Budget Analysis, Big Fast Results

Now initiative and preliminary findings from the GBS Independent Impact Evaluation.

The discussion on PAF 2012 results noted achievements and concerns. It was

agreed that the lessons from 2012 will be taken up as future actions and targets for

PAF 2013 which will focus on fewer strategic and results oriented indicators. Overall

PAF performance was considered to be SATISFACTORY.

The Government and Development Partners agreed to enhance dialogue on results.

The key focus for dialogue next year between Government and development

partners will be: sustainable growth (energy and agriculture), quality of social

services at local government level, and public financial management and

transparency. The meeting also heard about the Government’s new Big Fast Results

Now! Agenda which will strengthen delivery across six critical areas: Energy, Oil and

Gas, Agriculture, Education, Transport, and Revenue collection.

In the course of the deliberations it was reconfirmed that GBS remains Tanzania’s

preferred aid modality. GBS Development Partners were acknowledged for

improving their disbursements and for ensuring predictability of GBS in 2012/13 –

just under half a billion US dollars. They pledged to enhance predictability of GBS

disbursements on the basis of reinforced dialogue. In conclusion there was

consensus that the continuing challenge for both partners is to support sustainable

growth which benefits Tanzanian citizens’ at large leading to a significant decline in

poverty.

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The presentation on the proposed Big Fast Results Now initiative as a new approach

to improve implementation and delivery of results was positively received. The

initiative recognized the need to make improvements in prioritization, discipline, and

efficient public sector, economic and political governance and in addressing key

constraints to development.

The presentation on the on-going GBS impact evaluation was commended for

bringing the GBS partners back to its basic principles: flow of funds, policy dialogue,

and technical assistance and capacity building. A joint team will be established to re-

engineer GBS around the recommendations from the final evaluation due out in

March 2013.

In conclusion there was consensus that both parties (government and development

partners) will continue to address the challenges of sustainable and shared growth to

ensure that growth benefits the majority of Tanzanian citizens.

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1.0 LAUNCH OF THE 2012 GBS ANNUAL REVIEW

1.1 Introduction

The 2012 General Budget Support (GBS) Annual Review meeting which marks the

end of the 2012 GBS annual review cycle was held for one day (19th November,

2012) at National College of Tourism – Bustani Campus. The main objective of the

review was to assess the Government and GBS Partners performance against their

respective commitments as agreed in the Partnership Framework Memorandum that

was signed in May 2011 and the Performance Assessment Framework (PAF) 2012.

It provided an opportunity to discuss preliminary findings of the GBS Independent

Evaluation that is being conducted by FISCUS and REPOA.

Against this objective the 2012 GBS annual review had four main agenda items:

i. Presentation and discussion of 2012 GBS PAF implementation, including

successes and challenges and an overview of the PAF 2013;

ii. Presentation and discussions of the New Budget Cycle and Rapid Budget

Analysis;

iii. Presentation and discussions on the Big Fast Results Now initiative; and

iv. Presentation and deliberation on the preliminary findings from the GBS

Independent Evaluation.

1.2 Welcoming Remarks by the Permanent Secretary of Ministry of Finance

The Permanent Secretary for the Ministry of Finance made a welcoming statement

to all participants. In his welcoming remarks, the Permanent Secretary expressed

sincere appreciation on behalf of the Government to the GBS Partners for their

support during the year under review as most were able to meet their commitments

on schedule and provided valuable advice. He appreciated the spirit and cordial

relationships during the year with respect to dialogue at various levels (Sector,

Cluster and Troika). He assured the Development Partners (DPs) that the

Government will continue to fulfill its obligations as agreed in the Partnership

Framework Memorandum (PFM) and in the Performance Assessment Framework

(PAF).

1.3 Remarks by the Development Partner Chair

In his remarks, the Chair of the PRBS Development Partners Group in Tanzania

applauded overall PAF 2012 performance. He appreciated the realism of this year’s

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budget although implementation remains a challenge in terms of improving public

sector finances and expenditure. .

He further noted that this year’s commitment from the budget support donors

remains just under half a billion US dollars - a significant contribution to the budget.

He also noted that DPs have provided 68% of their budget support payments –$337

million - in the first quarter of this year.

He said that there are a large number of other stakeholders who have a legitimate

interest in GBS, including Parliamentarians, CSOs and the Tanzanian citizens.

Therefore it is essential that the outcome of this review is shared transparently with

these other stakeholders. This is an important contribution in the promotion of

national accountability.

Growth and poverty

In his remarks the Chair identified the crisis in the energy sector as one of the critical

challenges confronting Tanzania. He further noted that energy is fundamental to

growth, and the continuing crisis is a brake on Tanzania’s development. Addressing

sustainable financing for the energy sector is essential and action is needed

urgently.

Results and the longer term

The Chair applauded the Government for recognizing the need to transform ideas

and policy into implementation and results. This commitment is being borne out by

the development of a new and exciting approach to the delivery of results drawing

lessons from successful approaches adopted in Malaysia.

The Chair welcomed the opportunity to align DPs behind a more focused set of

Government priorities and focus DP dialogue on the Government’s own achievable

priorities for implementation and delivery - particularly important as the proportion of

assistance subject to performance tranches increases (to as much as 50% in some

cases).

The Partnership

The Chair concluded that dialogue around budget support leaves room for

improvement. Removing underlying processes monitored in the PAF and ensuring a

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common assessment of the underlying principles1 of budget support provide a critical

opportunity in the short term. Development partners are also working at the request

of Government to harmonise their performance tranche assessments. This should

help focus and strengthen dialogue.

1.4 Opening Remarks by the Minister of Finance

The 2012 GBS Annual Review was officially opened by the Minister for Finance. In

his opening speech, the Hon. Minister said that the GBS annual review event is an

important requirement of the Partnership Framework Memorandum. It provides an

opportunity for the Government and the GBS partners to assess performance of

mutually agreed commitments that are considered essential for Tanzania’s growth,

development and poverty reduction.

The Minister expressed the Government`s commitment to implementing issues

agreed in last years` GBS annual review which include; (i) linking tangible results to

the GBS’s Performance Assessment Framework (PAF), (ii) Reviving the Public

Expenditure Review (PER) process as a tool for strengthening budget management

and systems that promote accountability and efficiency in the utilization of public

resources; (iii) strengthening of public financial management systems. He also noted

that the Government and DPs have put in place a results oriented and multi-year

Performance Assessment Framework, the assessment of which forms a crucial part

of 2012 GBS Annual Review.

The Minister commended the good progress made to revitalize the PER process as

committed to last year. The Champions Group has been formed consisting of key

senior Government and DP officials and the joint permanent PER Secretariat has

been reconstituted with a dedicated team to coordinate and ensure delivery of

agreed commitments.

The Minister emphasized the continuing strengthening of its systems and processes

for ensuring that the funds received are effectively allocated, managed and

accounted for in support of the country’s growth, development and poverty reduction

agenda. He noted that the GBS modality is still facing a number of challenges which

need to be addressed if it is to remain a long term predictable financing instrument.

He expressed concern over signs of non-adherence to the agreed commitments and

1 Underlying principles of GBS for this partnership arrangement:(i) Continuing sound

macroeconomic policies and management;(ii) Commitment to achieving MKUKUTA II objectives and Millennium Development Goals;(iii) Continually strengthened budgeting and public financial management systems; (iv) Continuing peace and respect for human rights, the rule of law, democratic principles, and the independence of the judiciary; and (v)Good governance, accountability of the Government to the citizenry, and integrity in public life, including the active fight against corruption in accordance with the laws of the United Republic of Tanzania.

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principles as laid out in the Partnership Framework Memorandum (PFM). In the spirit

of partnership, there is a need to identify and address the challenges that the GBS

modality is facing.

The Minister also observed that there is a need to have fewer actions and indicators

in order for GBS to deliver more meaningful dialogue.

Public Expenditure Review and Public Financial Management

The Minister reiterated the importance of the Public Expenditure Review (PER)

process as a tool for strengthening budget management and ensuring the efficiency

and transparency in the utilisation of public resources. This has been done in the

context of MKUKUTA and MKUZA implementation, carried out in a participatory

manner, involving all stakeholders in growth, development and poverty reduction

issues to effectively engage in open dialogue.

The Minister pointed out that over the last year the Government has made efforts to

revive and strengthen the PER process and provide space for it to play its role

effectively. It is with this understanding that the Government used the work of the

Joint (Government and DPs) Task Force and the PER retreat to generate inputs that

were fed into the Planning and Budgeting Guidelines Committee. He also noted the

Government’s commitment to further strengthen the PER process as a basis for

effective dialogue on budget issues and broad participation of key stakeholders.

The Minister reiterated Government commitment to effectively implement PFMRP

Phase IV, launched in June this year. The programme will be implemented over the

period of five years, covering revenue management, planning and budget

management, budget execution, transparency and accountability, budget control and

oversight, change management, and programme monitoring and evaluation.

Other 2012 National Issues

Progress in several National issues was reported by the Minister as follows:

(i) The population and housing census successfully took place from 26th

August to 7th September;

(ii) The Household Income and Expenditure Survey is in the field and on

track to deliver results in mid-2013;

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(iii) Parliament passed the Public Private Partnership (PPP) Act No. 18 of

2010 in August;

(iv) The Government has initiated joint venture negotiations with power

generation investors for the following projects:

- Mtwara 300 MW;

- Mpanga 144 MW;

- Power transmission projects of 400 KV for Morogoro – Tanga –

Kilimanjaro – Arusha (682 kms) and

- Expansion of the North West Grid for Kagera, Kigoma and Rukwa

Regions (1000 kms).

The Chair of the GBS Development Partners asked the Minister and his team for clarification on the issue of adverse effects on the disbursement schedule. He reminded the meeting that DPs have provided 68% of their budget support payments –$337 million - in the first quarter of this year, against the target of 55%, and as of November DPs will have made 100% of their disbursements in line with their quarterly commitments. He requested the speech to be amended before being circulated to the press.

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2.0 PRESENTATIONS AND DELIBERATIONS

2.1 PAF 2012 Implementation and 2013 PAF Overview

The session on 2012 PAF Implementation and 2013 PAF overview was co-chaired

by Mr. Ramadhan Khijjah, the Permanent Secretary, Ministry of Finance, and Mr.

Marshall Elliot, Head of DFID Tanzania and Chair of the PRBS Development

Partners Group in Tanzania.

2.1.1 Presentation: 2012 PAF Implementation and 2013 PAF Overview

The presentation by Government gave an overview of PAF 2012 implementation and

PAF 2013 overview. He presented PAF 2012 implementation following the three

structure of the PAF, namely: underlying processes, key policy actions, and outcome

indicators.

Underlying Processes

The Government noted that out of seven (7) underlying processes six (6) were rated

as satisfactory and one (1) was unsatisfactory.

Key Policy Actions

The rating of key policy actions shows seven (7) achieved, and five (5) key policy

actions not achieved.; The KPA s not achieved were:

1. Put in place integrated land management information system in Northern and Eastern Zones. This target was missed by 10% due to delays of funding from our Development Partners. Plans to fully install the Northern and Eastern geodetic control system are now delayed by about 6 months.

2. Interface central and local government ICT;

3. Streamline and rationalize national systems and processes for inter-governmental transfers to LGA;

4. The Government enhances domestic tax revenue mobilization with better transparency and business environment ; and

5. Strengthen institutions of public investment management and PPP.

Outcome Indicators

Out of 37 outcome indicators, 20 indicators were achieved, 13 were not achieved

and 4 were not assessed. Outcome Indicators showing good results were:

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(i) Enhancement of Cargo Handling at the Port

(ii) Extractive Industries Transparency Initiatives; good progress towards validation

(iii) The Public Expenditure Review Process has been revamped, and enhanced Secretariat in place

(iv) Maintained sound macroeconomic stability and public financial management; PSI on track

(v) Rural roads maintained to good and fair condition

(vi) Primary schools leaving exam results have improved

(vii) Increased births taking place at health facilitied

(viii) Reduced number of legal cases delayed in the judiciary.

The outcome indicators not achieved include:

(i) Proportion of villages with land use plans

(ii) Electricity plant availability

(iii) % of trunk and regional roads network in good and fair condition

(iv) Proportion of councils in which less than 40% of standard VII pupils passed the PSLE in the previous year

(v) Form 4 examination pass rates (Division I-III) national average for the previous year disaggregated by gender

(vi) Nurses and nurse midwives per 10,000 population by region

(vii) Proportion of households in rural settlements with access to clean and safe water from improved/ protected sources

(viii) Proportion of households in regional towns with access to clean and safe water from improved/ protected sources

(ix) Proportion of households in Dar es Salaam with access to clean and safe water from improved/ protected sources

(x) % of under five children receiving birth certificates

(xi) Reduction in outstanding audit matters

(xii) Value of tax exemptions as a share of GDP

Despite good results shown in PAF 2012, challenges still remain in the areas where

achievement was below expectations. In particular, the following areas were singled

out:

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(i) Access to clean and safe water slightly missing the targets for 2012, and

further work is still needed on the new water MIS system.

(ii) Legislation on simplified domestic tax revenue mobilization was delayed.

(iii) Delays on revising the institutional changes to manage public investments

and public private partnerships better.

(iv) Remaining challenges in the energy sector despite achievement of the PAF

2012 action on energy subsidies.

(v) Two studies in public financial management are detailed, but the overall

PFMRP M&E framework shows a much more positive development.

The presentation concluded by drawing lessons learned for PAF 2013:

(i) Fewer indicators with clear methodologies for monitoring;

(ii) Actions should be realistic and strategic that demonstrate results on increased growth and poverty reductccvvvcion; and

(iii) Endorse PAF 2013 by the end of December 2012 to allow ample time for implementation.

PAF 2013 proposals were summarized as follows:

(i) The Underlying Principles under the Partnership Framework Memorandum will be monitored through a joint assessment to be established by January 2013;

(ii) Based on (i) above agreed to remove all underlying processes to reduce

transaction costs and to be monitored at sector level;

(iii) GBS Development Partners to harmonize their performance tranches for increased transparency;

(iv) Opportunity to focus dialogue on sustainable growth, service delivery at the local level, transparency and public financial management; and

(v) Agreed to monitor poverty trends more comprehensively going beyond numeric targets.

The presentation concluded with the following observations to support GBS dialogue

going forwards:

Frank dialogue based on mutual trust and focused on substance.

Reduce transaction costs by agreeing to fewer meetings that monitor

implementation and ensure that dialogue has value added.

Less frequent change of leadership from the DP side in order to build stronger

sustained dialogue and institutional memory.

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2.1.2 Plenary Discussion

In the discussion that followed the presentation, the following points were raised:

(i) There was an appreciation that this year’s PAF performance has slightly

improved compared to the previous year. Having set clear assessment

criteria for most of the elements measured through the PAF, it is now

possible to more clearly demonstrate where action is most needed.

(ii) While commendable progress was made in launching the new public

finance management programme, publishing budget books, and

enhancing domestic accountability concern was expressed over the delay

of publication of budget information and guidelines that allow citizens’

access to budget information.

(iii) Concern was expressed over the constraint the energy sector is having on

growth and development. In particular, concern over governance and

operationalization of Tanesco (subsidy and cost recovery) was expressed.

In this regard, it was pointed out that the Government is working closely

with the WB and IMF to address the financial sustainability of Tanesco.

Furthermore the Government is ready to work with serious investors in the

energy sector and is ready to work with Development Partners.

(iv) Concern was expressed over the quality and equity of public service

delivery especially to poor people and poorly resourced areas. Specifically,

the health sector was mentioned as a sector where quality and equity

needs to be addressed by allocating more resources to marginalized areas

and addressing the shortage of staff and security challenges in rural areas.

(v) Efforts being made to include more strategic agriculture indicators in PAF

2013 were welcomed. However, concern was expressed over the

effectiveness of the indicators used and the challenges of monitoring;

(vi) It was suggested that DPs should increase their commitments and

disbursements in the first quarter of the financial year. It was noted that

this year, the amount released in Quarter 1 was ahead of target. However,

there is room for discussion on how to make the targets more stretching

for DPs. The Government should back this proposal with more explicit

indication of the needs for further frontloading and present the case for

discussion with DPs. It was proposed that Government and DPs should

identify constraints to further frontloading of disbursements and take action

to address those constraints.

(vii) Use of natural resources in more sustainable ways deserves greater

attention and stronger action by Government to curb unsustainable use of

natural resources.

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2.2 New Budget Cycle and Rapid Budget Analysis

2.2.1 Presentation – New Budget Cycle and Rapid Budget Analysis

This session was jointly chaired by the, Permanent Secretary, President’s Office

Public Service Management and the Country Director of the World Bank. The New

Budget Cycle was presented by the Deputy Permanent Secretary, Ministry of

Finance and the Rapid Budget Analysis was presented on behalf of the DP`s by, the

Lead Economist from the World Bank.

2.2.2 Presentation – New Budget Cycle

The Government presented the current budget cycle, the challenges it faces and

justification for the new budget cycle. The presentation recapped on the importance

of the Government budget which serves as a tool for economic and financial

management and accountability. Despite the importance of the Government budget,

the current budget cycle faces the following challenges (i) Stakeholders less than full

involvement in the budget process; (ii) Aligning sectoral priorities to overall national

priorities; (iii) Insufficient time for Parliamentary Committees to effectively engage in

the scrutiny of the budget proposals (iv) the misalignment of the PER/GBS review

process with the budget cycle has resulted in insufficient input into the budget

process; (v) delays in firming up development partners support in the government

budget renders budgeting for foreign funded projects/activities problematic; (vi)

delays in implementation of the new budget by at least two months; and (viii) under-

estimation of non- tax revenues by MDAs, RSs and LGAs.

The new budget cycle will address these challenges. The timing of the new budget

cycle will be as follows:

i. Preparation of the Plan and Budget Guidelines will commence earlier (in

August and end in October);

ii. The Planning and Budget Guidelines will be approved by Cabinet by

November and will be distributed to MDAs, RS and LGAs immediately;

iii. MDAs, RS and LGAs will prepare their budget proposals between November

and February;

iv. The budget proposals will be submitted to the Ministry of Finance (by MDAs,

RS and LGAs) by end of February for scrutiny and consolidation

v. Cabinet will approve the budget proposals in April;

vi. Budget books will be printed and made available to the Parliamentary

Committees beginning May;

vii. The Minister of Finance will present the National Budget to Parliament on the

second Thursday of June as is currently done;

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viii. Parliament will approve the Finance Bill and the Appropriation Bill by of June

to make it possible for budget implementation to commence on 1st July; and

ix. Parliament will continue to debate MDA and regional programmes in the

National Budget from June to August.

The new budget cycle is expected to give ample time for MDAs, RS and LGAs to

make adequate preparations of their budgets and to widen space for Parliamentary

Committees and other stakeholders to participate more effectively in the budget

process. It is also expected that DPs and other stakeholders will align their activities

with the new budget cycle as appropriate.

2.2.3 Presentation - Rapid Budget Analysis

The presentation by the World Bank on the Rapid Budget Analysis reiterated

Tanzania’s good macroeconomic performance with rapid and constant real GDP

growth above 6 percent over the decade. He also noted that the external balance

has been under control with stable reserves. The presentation pointed out that there

had been significant improvement in fiscal policy management for the year

2011/2012 and a reduction of the deficit from 6.6 per cent to 5.5 percent of GDP.

The adjustments made were higher than agreed with the IMF’s PSI and represented

a first time reduction since 2008/9. The adjustments were driven by significant but

unequal cuts in current spending; more revenue collection; and higher execution of

development spending than in 2010/11 most of which was directed to roads and

energy.

In the last review period, however, there have been a number of challenges including

growing inflationary pressures, a decline in external reserves from 4.5 to less than 4

months equivalent of non-factor imports, depreciation of the local currency by about

20% in less than 1 year, and higher fiscal deficits.

The presentation further pointed out the:

i. Increasing gap between planned and executed budget;

ii. Shift towards new infrastructure needs to be accompanied by capacity to

select and implement investment projects optimally; maintaining the right

balance between infrastructure with investments in the social sectors; and

paying close attention to maintenance;

iii. New sources of funding which include concessional loans and non-

concessional borrowing on both domestic and international market and the

associated increase in debt stock and debt servicing with implications on debt

management;

iv. Increasing off budget expenses;

v. Rising tax exemptions despite commitment by Government to reduce them;

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vi. Rising public pension spending in relation to earnings; and

vii. Local Government Authorities effectiveness is hampered by allocations not

being clearly defined, transfers from Central Government, and inadequate

monitoring of expenditures on the ground.

The presentation concluded by urging all parties to develop a work programme to

ensure a revitalization of the PER process. There was a need for close monitoring:

RBA and information sharing along the budget cycle and TA through analytical tools;

and joint analytical work to address some emerging issues.

2.2.4 Comments by Government

In discussing the presentation on the Rapid Budget Analysis, the Commissioner for

Policy Analysis expressed appreciation on the RBA as a guiding tool for addressing

challenges of budget implementation and minimizing the deviation from budget

approvals. It was appreciated that the presenter made proposals to address them. It

was mentioned that the RBA has been addressing both revenue and expenditure

issues which the Government has been considering with great attention as inputs for

the next budget process. All challenges and proposals raised through the RBAs have

enabled the Government to improve the preparation and execution of plans and

budget, service delivery and monitoring and reporting from various stakeholders. The

Government indicated willingness to continue providing requisite data and

information on a timely basis for this exercise and proceeded to identify several

steps that the Government was taking to tackle inflation, reduce tax exemptions, and

manage new funding sources. Detailed responses to each issue raised in the RBA

included:

1. Inflation: continues to reduce reaching 12.9% in October and the Government

is focused on reaching single digit inflation by mid-2013

2. Reducing tax exemptions: the Government welcomed recommendations by

the RBA team to address the high level of tax exemptions which contributed

almost 4 percent of GDP in tax revenue losses in 2011/12, a situation which is

of concern to the Government. A study on managing tax exemptions with

recommendations to achieve “quick wins” in the 2013/14 budget will be

presented to the PER Champions group in early 2013.

3. New sources of funding: the Government experienced limited availability of aid

in-flows including concessional funds, and as a result the Government

embarked with non-concessional borrowing for key infrastructure

development projects. Government does not assess the fiscal and debt

sustainability “at risk”, has established monitoring systems, and is in the

process of establishing a debt management division within MOF to be a one

stop centre for debt management issues.

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4. Low execution rate: affecting the implementation of planned activities, shift of

the budget to finance infrastructure, off-budget expenses, increased tax

exemptions, increased government borrowing from pension funds, inequality

in resource allocation among LGAs, as well as monitoring and evaluation of

public resources. The government takes these challenges and proposals

positively. It was indicated that the Government will take them into account

during the preparation and implementation of budget in the medium term.

5. Planning vs. Execution: the Government budget is executed based on

resource availability (cash based budgeting). However, release of funds for

infrastructure ministries averaged above 80%. The underfunding was caused

mainly by low or delayed disbursement of external funds and procurement

procedures.

6. Off-budget expenses: The Government has stopped issuance of guarantees

for one year to pave the way for detailed evaluation of previous guarantees so

as to come up with a more appropriate modality of managing the off-budget

expenses. Furthermore the Government will make follow-up on IMF advice of

effective management of off-budget expenses.

7. Expenditure cuts in 2011/12: The budget cuts for 2011/12 were necessary in

order to comply with IMF and WB advice on reducing budget deficit from 6.5%

to 5.5% of GDP for ensuring macro/fiscal sustainability. The budget was

affected by the emergence power plan. The Government is taking measures

to avoid unnecessary expenditure cuts in future.

8. Delays in release of development as well as built-up of arrears in 2011/12: It

was pointed out that sources of development financing include: 5% of

domestic revenue; domestic borrowing (1% of GDP); non-concessional

borrowing; and external funds (Basket, project funds, D-Funds). It was

observed that there have been some challenges in the negotiation process

and borrowing procedures for accessing non-concessional loans, which in

2011/12 were accessed during the last quarter. For the case of D-Funds,

most of data have been declared during the fourth quarter. As a way forward,

it was proposed that the Government will start negotiations early in line with

the new budget cycle. On the side of the DPs, those who are yet to abide to

AMP requirements are urged to post their support on AMP soon after release

of such funds.

9. Infrastructure maintenance: the Government has been allocating resources

for maintenance of infrastructure across sectors at different levels; this

problem is accentuated by classification challenges in terms of capturing the

relevant data. For instance, funds that have been allocated to public

institutions and LGAs are classified under line items of transfers which include

maintenance budgets.

10. Spending on public debt: it was pointed out that the increases resulted from

payment of due debts from previous loans and new government initiative to

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finance infrastructure development projects through non-concessional loans

with short maturity period.

11. Available data on actual local government expenditures: since 1st July, 2012,

133 LGAs have adopted the use of Epicor/IFMS for revenue and expenditure.

This makes it possible to access data on actual LGAs expenditure and carry-

over balances are to be entered into the IFMS as part of revenue for new

financial year and respective expenditure will be reflected.

12. Inequity in resource allocations among LGAs: it was reaffirmed that the

Government is reviewing formulae used in allocation of resources to LGAs.

13. Health sector foreign funding: is highly under-estimated due to large off-

budget funding: The gravity of this issue was acknowledged and the

Government agreed to continue to address the problem by urging the DPs

who have not managed to channel their budget support through the

Exchequer system to do so.


Plenary discussion included:

(i) Appreciation was made of the RBA and noted as a good input for stressed

that the RBA is to be a guiding tool that requires the Government to stick

to the approved budget. It was observed that discussions were in the final

stages regarding renewal of the PSI programme, macro-economic

performance was still strong, and inflation is coming down.

(ii) The DP`s welcomed the new budget cycle and are open to provide more

support as necessary. An observation was made on the current financing

gap that needs to be clearly known with proposals for addressing it;

(iii) It was observed that budget cuts are painful but necessary. They should

be taken as a challenge to making the budget more realistic, a challenge

that will be addressed by adopting the new budget cycle;

(iv) The Ministry of Finance will continue to provide requisite data and

information on timely basis. It was suggested by DPs that timely reporting

should also include reporting by parastatals;

(v) It was observed that the increase in debt should be interpreted with some

caution. In particular, the following observations were made:

a. The debt stock is cumulative reflecting more of past debts than current

over-borrowing;

b. The debt ratio is influenced by the use of nominal GDP growth pointing

to the need for deflation to present values;

(vi) DPs were encouraged by Government leadership on an action plan for

Tanesco and initial discussions with the WB. However, fiscal monitoring

would be facilitated by enforcing timelier parastatal reporting to MoF. This

20

would facilitate having a more holistic view, highlighting risks but also a

broader view of economic impact of the parastatal sector.

(vii) From the DP side, concern was expressed over the contribution of

parastatals like Tanesco and TPDC to the budget deficit and national debt.

The Government side acknowledged these challenges but clarified that

Tanesco was also a major concern for the Government and that it was

working on its repositioning in the short, medium to long term. The

Government is working closely with DP`s to achieve the targets that

ensures Tanesco operates effectively and efficiently. It was also pointed

out that the magnitude of the deficit due to TPDC could be reduced if the

revenue side of TPDC operations was recognised; It was also pointed out

that if prioritization and sequencing of projects should fall short, leading to

further disruption of works and accumulation of overdue obligations, the

Government might have to consider external borrowing to settle the latter.

The Minister of Finance promised to look into the matter.

(viii) It was also observed that large fiscal threats were imminent due to a large

backlog of contracts as in the case of Tanroads. The need to prioritise

transport in the MTEF was advised.

(ix) It was observed that a substantial part of tax exemptions are on

investment projects. The Ministry of Finance will review this situation with

a view to reducing the exemptions to less that 1% of GDP.

2.3 Big Fast Results Now

This session was jointly chaired by the Permanent Secretary for the Ministry of

Energy and Minerals and H.E, the Ambassador of Sweden in Tanzania. The

presentation on the Big Fast Results was made by the Executive Secretary of the

Planning Commission.

2.3.1 Presentation: Big Fast Results Now (BFRN)

The government provided the background of the Big Fast Results Now which came

as a result of warning lights from a review of the implementation of the Tanzania

Development Vision (TDV) 2025 which was carried in 2009/10. The review pointed

out four issues that need to be worked on to unleash Tanzania`s growth potential:

(a) Prioritisation of actions and strategic resource allocation;

(b) Implementation discipline grounded in performance benchmarks;

(c) Political and economic governance; and

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(d) Tackling head-on the key constraints such as the infrastructure gap; low

agricultural productivity; low industrialization; human capital and skills gap;

critical services, tourism, trade and financial.

In the case of Tanzania, Big Fast Results Now (BFRN) came as a result of Langkawi

International Dialogue held in June 2011 in Malaysia. The President of the United

Republic of Tanzania participated in this dialogue where the Prime Minster of

Malaysia shared his country`s transformation experience in the spirit of fostering

South-South Cooperation and smart partnership. During this retreat the Head of

States and Government were exposed to methodology used by Malaysia to score

Big Fast Results. This was followed by 4 days BFRN seminar held in November,

2011 in Kuala Lumpur, Malaysia where a Government team led by the Executive

Secretary of Planning Commission participated.

In the presentation the Government shared the pillars, and other countries

experience of the BFRNs approach. The following pillars were presented:

(i) Bold leadership committed to change and take the country forward;

(ii) Ruthless focus on priorities;

(iii) Selection of drivers and enablers;

(iv) Discipline of implementation; and

(v) Entrenched government accountability.

BFRN approach involves the following steps:

(i) Set your strategic direction (True North);

(ii) Conduct labs which facilitate an intense problem solving environment with a dedicated full time working;

(iii) Run open days to share lab output with the public and solicit inputs;

(iv) Publish the roadmap, meaning telling the people what they are going to do;

(v) Set KPI (key performance indicators) for the whole Cabinet;

(vi) Implementation;

(vii) Independent Performance Review and Audit; and

(viii) Annual report

Other experiences of working with the BFRN approach were mentioned including

United Kingdom, South Africa, South Korea, Indonesia, Philippines, Bhutan, Kenya

Vision 2030 Delivery Secretariat; Ethiopia’s Agricultural Transformation Agency and

22

South Australian Public Sector Performance Commission (PSPC). The presentation

also noted that the BFRNs approach was undergoing the process of domestication in

Tanzania. This was being done through Cabinet retreats in August and October

2012.

In the August 2012 two-day Cabinet retreat the key theme was “Transformational

leadership for efficient and effective Government delivery on vision 2025”. The

intention was to expose the Government leaders to the methodology used by

Malaysia to score “BIG FAST RESULTS NOW” where key lessons, the missing link,

resolutions and catalytic steps were agreed. Among the resolutions for the retreats

are:

(i) Adopt and customize the BFRN model to suit the Tanzanian environment;

(ii) Improve delivery and accountability by emulating the PEMANDU model of coordination, problem solving and M&E; and

(iii) Put in place a robust and enforceable M&E system and transparent incentives system for performers and non-performers.

The catalytic steps agreed were:

(i) Establish a multi-disciplinary team drawing from a wide spectrum of stakeholders to propose and prepare a roadmap for operationalization of an efficient and effective Government delivery unit and the lab approach; and

(ii) Within the context of the national development and MKUKUTA and MKUZA, Ministries were tasked to review their strategic and action plans and come up with focused National Key Results Areas (NKRAs) and KPIs. Ministries were also tasked to create respective delivery units that will feed into the national delivery unit.

In implementing the retreat resolutions the Government pointed out that a multi-

disciplinary committee team had been set up; Ministries had prepared action plans

to implement ADP 2012/13, FYDP and LTPP; and POPC had conducted training

seminars for management teams of MDAs to share the BFR methodology,

resolutions of August 2012 Cabinet retreat; build consensus; and get MDAs

feedback on its operationalization in the context of Tanzania.

The August resolutions were followed by another three day Cabinet retreat in

October 2012 which discussed the selected MDA`s action plans to implement TDV

2025; the report of the multi-disciplinary team on the proposed road map to

operationalize an efficient Delivery Unit and the Lab approach.

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The presentation touched on the elements of BFRN approach applied in Tanzania.

Ministry of Health and Social Welfare; Tanzania Revenue Authority, Road Fund

Board; and others like Swissport, Universities’ promotion system for academic staff,

MCC projects; and private sector companies were pointed to have the approach of

BFRN.

The government provided the road map to improve Government Delivery which

includes;

(i) Establishment of the Delivery Unit which will be an independent

department under the Presidency. The unit will be known as President`s

Delivery Bureau (PDB); and

(ii) Operationalisation of the Lab approach where NKRAs have been

identified:

1. Energy, Oil and Gas

2. Transport (Central transport Corridor)

3. Revenue Collection

4. Water

5. Agriculture

6. Education

The presentation was concluded by urging the DPs to strongly support the

Government on this important Government led initiative.


In the discussion the following points were raised:

(i) Many of the contributors appreciated these important Government-led

initiatives, especially the quest for more results and accountability. A

number of DPs expressed willingness to support the initiative. However,

DPs proposed that the Government needed to indicate how DPs were

expected to participate and to clarify how this initiative related to existing

national development programmes and strategies as set in MKUKUTA and

Five Year Development Plan;

(ii) The initiative was commended as a good case of South-South

Cooperation. It was also suggested that experiences of Thailand, Vietnam

or other Asian countries would be useful too;

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(iii) Support on prioritization was expressed by reiterating the need of having

few priorities and to focus on them instead of having a large number of

priorities which are not attainable.

(iv) Some caution was made to the effect that some countries like Indonesia

had adopted similar approach but it has taken a long time without seeing

results. This implies that measures to transform words and intentions to

action and ensure that results are realised. It was suggested one important

prerequisite for realisation of results was the need to get this agenda into

the minds of the people so that it is understood and owned by the public.

It is important that accountability to the people on the ground is facilitated.

(v) The Government was encouraged to put a strong emphasis on improved

access to information, and to consider value of new technology and the

central role of the media. It was suggested that Tanzania may also want to

consider development of an information society. ICT, e-governance etc.

develop fast, can help to do things faster and more interactively, and

enhance transparency.

(vi) Interest in understanding the potential links between the BFRN lab outputs

and GBS going forwards. One commentary suggested that if this succeeds

the PAF of tomorrow is already drafted

(vii) The Executive Secretary concluded that they have chosen 6 areas to start

with, and there is still a heated exchange around approaching access of

water. He also said that the programme is deliberately ambitious to cover

lost ground in meeting Vision 2025. It is important to start from the top but

inclusivity is central and communication across a range of stakeholders

including the media is a key element.

2.4 GBS Independent Evaluation Preliminary Findings

The session on GBS preliminary findings was co-chaired by the Permanent

Secretary, Ministry of Industry and Trade and H.E, the EU Ambassador to Tanzania.

The presentation of the preliminary findings was made by Andrew Lawson on behalf

of ITAD, REPOA and FISCUS.

2.4.1 Presentation: GBS Preliminary Findings

Mr. Andrew Lawson started his presentation by making clear that these were

preliminary findings of the consultants and are subject to modification and refinement

in the light of additional data and analysis in the subsequent stages.

His presentation focused on three specific areas – i) the flow of funds, with a

particular focus on results in the education sector, ii) policy dialogue, iii) technical

assistance and capacity building. The presentation includes feedback on the

25

consultancy team's preliminary recommendations in relation to the design and

management of GBS. Information on the methodology and timeline of the evaluation

was also shared.

(i) Flow of Funds

He noted that the preliminary findings of the consultancy team suggest that GBS has

had an important “flow of funds” effect, which has facilitated the expansion of public

spending in the MKUKUTA and MKUZA priority sectors, with consequent benefits for

the improved coverage of social services and the improved maintenance of the road

network. GBS disbursements during the period were substantial both in fiscal

terms, where they represented on average 13.7 % of public spending over the seven

year evaluation period, and they comprised an average of 37.5 % of ODA. Secondly,

total annual disbursements were predictable; indeed they were generally in excess

of the amounts projected by the GBS members at the conclusion of the annual

review process. However, although quarterly disbursements were broadly consistent

with projections at the beginning of the evaluation period, over 2009/10 and 2010/11,

quarterly disbursements have been subject to more substantial delays (of 3-6

months), which may have created problems for Treasury management.

In terms of the use of funds, the consultants concluded that given the scale of GBS

and its discretion – a significant part of the increases evidenced during the

evaluation period in respect of non-salary recurrent spending, internally financed

Development spending, and in staff numbers within the health and education

sectors, were made possible by the GBS transfers. They noted that these increases

accrued predominantly to the six priority sectors identified in MKUKUTA and

MKUZA.

Further analysis in terms of the application of these funds within the priority sectors,

suggest that a major expansion in the coverage of primary and secondary education

has been achieved, as well as a significant improvement in the size and the quality

of the national road network. The Tanzania 2010 Demographic & Health Survey also

attests to a range of improvements in the water and health sectors since the 2005

survey. While some of these would seem more obviously related to programmes

funded under the Global Fund or GAVI (such as the rise in vaccination coverage, the

vast increase in HIV testing, the increased use of insecticide-treated bed nets), the

improvement in the proportion of households using a protected water source (from

49% to 57%), the increased coverage of post-natal care, the reduction in respiratory

infections in children and their more frequent treatment are all results which are likely

to have been significantly supported by the expansion in the GoT budget for these

sectors, and thus by GBS.

26

The consultants recognise that problems of quality, equity and efficiency in social

service delivery remain. However, the consultants did not find anything to suggest

that these are any more pronounced than they would be in other countries at a

similar stage of development of the network of public service provision. Moreover,

the consultants indicate that there are signs – at least in the education sector, of

appropriate policy responses to such problems.

(ii) Policy Dialogue

While recognising that good results have been achieved through GBS, the

consultancy team identified challenges in the quality of policy dialogue. The

evaluators recognise that stakeholders in Tanzania have been aware of these

weaknesses for some time and have started to introduce some corrective measures.

The evaluation team identified four inter-related weaknesses with the current

structures for performance assessment and policy dialogue:

- a less than adequate Government ownership and leadership, largely prompted by the DPs’ increased recourse to the use of GBS as “policy leverage”;

- high transaction costs;

- technical weaknesses in the definition of performance indicators and targets; and

- lack of a strategic, problem-solving orientation within the dialogue process.

The evaluation report will come up with recommendations on how to address the

challenges and make GBS more effective. The following preliminary

recommendations are made in light of the observed findings to enable stakeholders

to start addressing the weaknesses identified:

i. Consider introducing a formal separation between the assessment of the

disbursement conditions for the fixed tranches of GBS and the wider

assessment of progress with the implementation of MKUKUTA and MKUZA

and related sectoral and thematic reforms. The former should depend

essentially on fulfilment of minimum conditions related to macro-economic

management, commitment to MKUKUTA and MKUZA, implementation of

PFM reforms and transparency in budget reporting, as well as respect for

the underlying principles agreed in the Partnership Framework

Memorandum.

ii. In order to avoid conflicts of interest and ensure a more streamlined

assessment process, the assessment of the core conditions for the

disbursement of the fixed tranche should be undertaken through an annual,

independent, professional evaluation/review process whose findings would

27

provide the basis for the individual disbursement decisions of each GBS

provider. This would be a single unified process, which would draw on the

conclusions of the IMF PSI review, as well as the results of PEFA

evaluations and other such independent assessments.

iii. As part of this process, or in parallel, a formal annual or perhaps two-yearly

independent assessment of compliance by DPs with their commitments

under the Partnership Framework Memorandum should be undertaken.

iv. The Government of Tanzania should take the lead in defining a set of

service delivery targets and policy implementation targets for MKUKUTA

and MKUZA and for the related sectoral and thematic reforms. The

disbursement of the fixed, base tranches of GBS would not depend upon

progress in these areas, although the disbursement of performance

tranches would. In order to protect Government ownership over these

processes, the DPs providing performance tranches would need to commit

to make adaptations to the design of these arrangements, where

appropriate.

v. Support should be provided to Government to help with this reformulation

of the assessment and dialogue process. Its precise format would need to

be decided by Government but it might conceivably take the form of direct

long-term TA support to the GBS secretariat within the Ministry of Finance,

combined with high-level intermittent support from short term TA. Training

in the design and monitoring of performance indicators should probably be

provided too.

vi. A formal strategy should be developed to reduce transaction costs and to

keep control of them in future. This is likely to mean the elimination of the

cluster level from the framework of dialogue. It might also entail a formal

examination of the processes and procedures utilised for making

assessments, distributing analytical reports, undertaking consultations and

reaching decisions, so as to permit some streamlining (or business process

re-engineering) of these functions.

(iii)Technical Assistance and Capacity Building

The provision of technical assistance and capacity building is generally perceived as

the third element of the “Budget Support package”. Such inputs would normally be

focused on aspects of policy, institutional reform and monitoring linked directly to the

Budget Support dialogue - such as support to the monitoring of the PRSP and to the

development of statistics, or to PFM reform. In Tanzania, such arrangements are

notably absent. There are two principal reasons for this:

28

Firstly, GBS is now a mature instrument in Tanzania, having formally started

in 2001/02 after several years of programme aid and multilateral debt relief.

Secondly, there is a l “technical assistance fatigue” in Tanzania, which is in

part a reaction to the high levels of long-term technical assistance, which

were provided in the 1980s and 1990s, and which – rightly or wrongly –

have come to be rather negatively perceived by the Government of

Tanzania.

Thus, the evaluation team were unable to identify specific technical assistance or

capacity building support to Government, which was directly associated with the

GBS arrangements, which are the subject of the evaluation although a variety of

technical assistance arrangements are in place to provide technical and

administrative support to the GBS secretariat and to the various secretariats of the

Development Partners’ Groups for different sectors and thematic areas. These TA

support arrangements carry quite a high profile within the policy dialogue process for

GBS because they provide significant administrative support to the different tiers of

the GBS dialogue, and also provide funding for studies and high-level advisory

inputs, aimed at assisting the DPs to carry out their roles within the GBS dialogue.

There is some evidence that the extensive support provided through these

arrangements may have inadvertently served to undermine Government ownership

of the GBS process. Firstly, it seems to be the case that most of the studies and

technical outputs generated by these arrangements are made available in the first

instance to the DPs, rather than being tabled as independent inputs for the mutual

benefit of all parties in the GBS dialogue, including Government and, where

appropriate, civil society. Secondly, the volume of this TA support appears to be

excessive and, in their efforts to be useful, it appears that some of these staff may

have inadvertently taken up administrative and organisational functions, which

should more properly be managed by Government staff.


i. In the discussion there were much appreciation from every stakeholder with

respect to this study and the request was made to make this report available

by early March 2013 to all stakeholders.

29

ii. The interim report was discussed actively. It was pointed out that even before

the final report is out some improvements were already being made. For

instance, partners have started to improve budget support through joint

assessment and harmonised tranches and starting to establish key focus

areas for dialogue. There is now a need to swiftly agree on an action plan for

the way forward.

iii. The point about separating policy dialogue from disbursement was particularly

appreciated. Time for evaluation will be known in advance so that the

substantial time is spent on implementation not derailed by too frequent and

sometimes unplanned evaluations.

iv. It was observed that transaction costs are still high and that there is still room

to reduce the PAF drawing from lessons of the past years. Ensuring that the

GBS Chair represents the donor partner group with one voice was stressed.

v. The evaluation was commended for taking us back to principles of what is

GBS. The 3 areas: the flow of funds, policy dialogue, technical assistance and

capacity building for improvement are good.

vi. It was proposed that a joint team be set up to focus on process re-engineering

the GBS systems in line with what has been recommended. Such a process

would need careful management highlighting the size of GBS to Tanzania at

half a billion USD. It was proposed to get Lawson to work alongside the GoT

to implement the changes that are implied by the proposed recommendations.

It was further proposed that by the next GBS annual review a new agreement

would be signed that is consistent with the recommendations of the GBS

evaluation.

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3.0 CLOSING REMARKS

The closing session was officiated by the Minister for Foreign Affairs and

International Cooperation, Honourable Bernard K. Membe (MP), on Monday 19th

November, 2012.

3.1 Closing Remarks by GBS co-Chair

In his closing remark, Mr. Elliot thanked the Government of Tanzania and his GBS

colleagues for a positive and constructive GBS annual review. He emphasized the

following points:

1. PAF 2012: the Chair highlighted the successes of 2012 such as

macroeconomic management, the progress being made on PFM and initial

signs of improving quality in primary education; and also the challenges

including the urgent need to address financial challenges in the energy sector,

and to closely monitor debt sustainability in relation to non-concessional

borrowing including by parastatals.

2. Much of the discussion today has been about how we can work together more

effectively. We have agreed two new ways of working that will help us finalize

PAF 13 in a way that will enhance our dialogue:

(a) Move to a shared annual assessment of the underlying principles.

(b) Budget support donors aim to harmonize performance tranches and

triggers next year and use this to focus our dialogue on three areas for

the year ahead. These areas include:

- Sustainable growth – specifically the energy sector (and possibly

agriculture),

- Services at the local level – looking at quality and equity of service

delivery, and

- Transparency and public financial management – continuing

implementation of PFMRP, EITI validation, and implementation of

commitments made by Tanzania in the context of the Open

Government Partnership.

3. Highlighted the exciting new BIG FAST RESULTS NOW (BFRN) approach,

and stressed that enhancing institutional delivery capacity will be

fundamental.

31

4. Concluded by commending the evaluation session which provided insights

into ways to better organize GBS, with policy dialogue that adds value.

3.2 Closing Remarks by Minster for Foreign Affairs and International Co-Operation

(i) Expressed his gratitude for the honor of closing the 2012 General Budget

Support (GBS) Annual Review. He thanked the audience for participating and

providing insightful contributions. This has been possible due to the high level

commitment and participation by the Government and Development Partners.

(ii) Noted the impressive progress against a number of outcome indicators with

many of the agreed actions achieved and rated “satisfactory”. He also

restated the Government`s commitment to ensure the deliberations of this

meeting are fruitful. These deliberations are:

a) Sustaining GBS as the Government’s preferred aid delivery mechanism;

b) Enhancing equity and efficiency in service delivery by addressing the

remaining challenges in pay reforms, particularly implementation of an

incentive policy for the hard to serve areas;

c) Sustaining macroeconomic stability and robust public financial

management;

d) Ensuring effective implementation of the Big Fast Result approach; and

e) Adhering to the new Budget Cycle and ensuring enhanced predictability

of the medium term framework for both foreign and local funds.

(iii) The Minister reiterated Government's view to take further steps to enhance

efficiency in the dialogue including making sure that the next PAF is

simplified, implementable and focuses on promoting growth and poverty

reduction.

(iv) The Minister noted the achievement made by Tanzania under the MDGs. It

achieved Goal 2: universal primary education; way back in 2009. It has

registered considerable gains on Goal 3: promoting gender equality and

empowerment of women; and Goal 6: combating HIV/AIDS, Malaria and other

diseases. Other goals have also achieved moderate results. However, much

remains to be done to emancipate our people from poverty.

(v) The Minister concluded by urging Development Partners to continue

supporting the country and ensuring medium term predictability of aid flows.

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ANNEXES

ANNEX 1

GBS ANNUAL REVIEW, 19TH NOVEMBER 2012: PROGRAMME

VENUE: NATIONAL COLLEGE OF TOURISM – BUSTANI CAMPUS

TIME PROGRAMME RESPONSIBLE CO-CHAIRS

0800 - 0830 Registration Secretariat

0830 - 0845 Remarks from the PS MOF PS MOF Facilitator

0845 - 0900 Remarks from the GBS Chair

GBS Chair Facilitator

0900 - 0930 Opening Remarks by the Minister for Finance

Hon. Dr. William A. Mgimwa (MP) Minister for Finance

PST to Welcome Minister for Finance

0930 – 1000 Presentation of 2012 PAF Implementation and 2013 PAF overview

DSPFM PST / Head of DFID

1000 - 1030 Discussions on 2012 PAF Implementation and 2013 PAF overview

All PST / Head of DFID

1030 -1100 TEA BREAK All

1100 - 1115 Presentation on New Budget Cycle

CB PS- POPSM/World Bank

1115 - 1130 Presentation on Rapid Budget Analysis

World Bank & CB PS-POPSM/ World Bank

1130 – 1200 Discussion on New Budget Cycle and Rapid Budget Analysis

All PS- POPSM / World Bank

1200 - 1220 Presentation on Big Fast Results

PO-PC ES-POPC / Ambassador of Sweden

1220-1300 Discussion on Big Fast Results

All ES-POPC

1300 - 1400 LUNCH BREAK

1400 – 1430 Presentation on GBS Independent Evaluation Preliminary Findings

Consultants from FISCUS and REPOA

PS- MIT / EU Ambassador

1430 - 1630 Discussions on GBS Independent Evaluation Preliminary Findings

All PS- MIT / EU Ambassador

1630 - 1640 Closing remarks from GBS Chair

GBS Chair

1640 - 1700 Closing Statement

Hon. Bernard K. Membe (MP) Minister for Foreign Affairs and International Cooperation)

1700 - 1730 Press conference GBS Chair and Minister For Finance

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ANNEX 2

WELCOMING REMARKS BY MR. RAMADHANI KHIJJAH

ACTING PERMANENT SECRETARY, MINISTRY OF FINANCE AT THE OPENING OF

THE 2012 GENERAL BUDGET SUPPORT ANNUAL REVIEW NOVEMBER 19, 2012 AT

THE NATIONAL COLLEGE OF TOURISM, DAR ES SALAAM

Hon. Ministers Permanent Secretaries, Excellencies Ambassadors and High Commissioners, Excellencies Resident Representatives, Heads of Development Cooperation, Government Officials, Members of the Media, Invited Guests, Ladies and Gentlemen. It gives me great pleasure to welcome you all to the 2012 General Budget Support (GBS) Annual Review meeting which marks the end of the 2012 GBS annual review cycle. I wish to express sincere appreciations on behalf of the Government to the GBS Partners for their support during the year under review. Most were able to meet their commitments on schedule and whenever necessary, they provided valuable advice. I am optimistic this spirit will be sustained in future. Let me assure you that the Government will continue to fulfill its obligations as agreed in the Partnership Framework Memorandum (PFM) and in the Performance Assessment Framework (PAF). Excellencies, Ladies and Gentlemen, as you will have noted from the program circulated, this year’s Annual Review is unique, we have agreed on a one day programme. The main objective of the review is to assess the Government and GBS Partners performance against their respective commitments as agreed in the Partnership Framework Memorandum and the Performance Assessment Framework. Furthermore, it will be an opportunity to discuss preliminary findings of the GBS Independent Evaluation that is being conducted by REPOA and FISCUS. The 2012 GBS annual review will have four main agenda items. First, there will be a presentation and subsequent discussions on the 2012 GBS-PAF implementation, including successes and challenges. There will also be an overview of the PAF 2013. Secondly, there will be a presentation and discussions of the New Budget Cycle and Rapid Budget Analysis. Thirdly, there will be a presentation and discussions on the Big Fast Result Programme. Finally, we will have an opportunity to deliberate on the preliminary findings of the GBS Independent Evaluation. As you can see, we have a heavy agenda to be covered in one day. In preceding years, the Annual Review used to take two days but this year, we have agreed to do it in one day. I would therefore like to urge and appeal for your co-operation and commitment to the work ahead of us, in order to be able to achieve the same level of output and outcome. In our deliberations during this Annual Review meeting, Prof. Samuel Wangwe will assist us as facilitator and rapporteur of the 2012 GBS annual review. Excellencies, Ladies and Gentlemen, before I conclude, I want to extend special thanks to my Co-Chair, Mr. Marshall Elliot for his outstanding leadership during the year under review. Under his leadership, the GBS family has become more united, as reflected by the absence

34

of incidences of disagreements between Government and GBS Partners; there is also enhanced trust in cooperation between the two Partners. This has made my work as the Co-Chair much easier and effective. I thank you and commend you Mr. Elliot for this outstanding leadership. On the other hand, I want to welcome the incoming Co-Chair. I look forward to another wonderful year of strengthened Partnership under the new leadership. I would also like to take this opportunity to thank the Sector and Cluster Working Groups and the GBS Secretariat for the hard work that they have put in the preparation and facilitation of this year GBS annual review meeting. Please sustain that spirit so that we can be able to achieve even more next year. Excellencies, Ladies and Gentlemen, I would now like to invite my Co-Chair Mr. Elliot make some opening remarks before we welcome the Honourable Minister for Finance to deliver his opening remarks and to officiate the opening of the 2012 GBS annual review meeting.

I thank you all for your attention.

35

ANNEX 3

Opening Statement at the 2012 GBS Annual Review by Marshall Elliott, Head of the UK’s Department for International Development and Chair

of the PRBS Group of Development Partners in Tanzania

Honorable Minister of Finance

Permanent Secretaries

Ambassadors

Ladies and Gentlemen

Introduction

Tanzania remains one of, if not the largest recipient of General Budget Support anywhere in the world. This year’s commitment from the budget support donors remains just under half a billion US dollars - a significant contribution to the budget. This is a similar level to last year. We have provided 68% of our budget support payments –$337 million - in the first quarter of this year. The target was 55%. And as of November we are 100% on track with disbursing in line with our quarterly commitments.

We assess Government performance through the Performance Assessment Framework - the ‘PAF’. This year’s overall assessment is that PAF performance is satisfactory. But with a lower proportion – 58% – of key policy actions achieved, performance is not as strong as 2011. And notwithstanding the satisfactory rating, with overall PAF achievement at only 60% it is clear there is scope to significantly improve performance; particularly as some of the more important performance indicators have not been met. This is reinforced by the lack of any significant reduction in the level of poverty and the persistent levels of inequality.

Looking forward, this years’ budget is more realistic than last, as was recognized by the IMF in the context of the PSI, and we encourage you to implement it as planned. But implementation of the budget remains a challenge and getting quality basic services – schools, clinics, water points – to Tanzania’s citizens, including in remote rural areas, remains a priority for budget support partners.

The budget doesn’t cover everything. In particular it gives only limited information about parastatals, such as Tanesco, or about major new investments such as the new gas pipeline down to Mtwara. Given their developmental and financial importance we need to expand our dialogue to encompass a broader definition of public sector finance and expenditure. This will be particularly important over the longer term as Tanzania develops its newly discovered gas resources.

The Government is leading a revision of the joint assistance strategy for Tanzania –the JAST. In this context we hope we can use the evaluation session to think constructively about how we can strengthen the budget support instrument going forward so that it can continue to be relevant for the next decade.

Like last year, this annual review meeting is being held as a contractual event between Development Partners and Government. Because of its broad scope, there are a large number of other stakeholders who have a legitimate interest in Budget Support, including Parliamentarians, CSOs and the Tanzanian citizens. Development Partners believe it is essential that the outcome of this review is shared transparently with these other stakeholders. This is an important contribution to promoting accountability and we hope to work together to jointly improve the format of this annual review in the future. We welcome

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the Government’s commitment to including a substantive session at the Annual National Policy Dialogue where Government and Development Partners can jointly report back on this annual review.

Performance in 2012 based on the PAF

So let me turn to 2012 performance.

On the positive side:

Tanzania has made some progress in addressing the quality of basic services. Standard VII exam pass rate improved, and more people are receiving treatment for HIV. Policy actions on pay and incentives are starting to identify ways of supporting service delivery staff in some hard to reach areas.

Investment in infrastructure is showing results: with 59% of rural roads now passable (slightly above target).

2012 has seen the welcome launch of a new PFM programme by the Prime Minister and strengthened dialogue.

Tanzania is on track to be validated as EITI compliant.

Transparency of the budget has improved with more information being published on line and made available to the people of Tanzania, although continued efforts are needed to ensure that information is published in a timely fashion.

Dialogue between Development Partners and the Government has improved in some areas: the high level dialogue on anti-corruption has provided a valuable forum for discussing government action on anti-corruption. I would like to take the opportunity to thank the Honorable Minister of Finance for his constructive participation.

Tanzania has systems and institutions that are increasingly able to identify and deal with corruption and we have heard about positive progress in this respect. But we are all agreed that much more remains to be done to ensure accountability to taxpayers in Tanzania, and also abroad. Earlier this year we saw the role that accountability institutions, including the media took in identifying allegations of wrongdoing. If these allegations are substantiated it will be important to see due legal process applied expeditiously and transparently.

The restarting of the PER process under the supervision of the “Champions Group” has also been a welcome development. This process is at an early stage but I hope we can all continue to give it the commitment to take it forward.

Against this positive picture, progress still remains [too] slow in other areas:

The government has been slower than expected in taking forward important new legislation on tax administration and public investment management.

Studies on important Public Financial Management issues have been delayed.

In the water sector targets have been missed. However, significant improvements in financial management should help to speed up implementation in the sector. This along with improvements in monitoring data should make it possible to set more realistic targets for 2013.

Significant concerns remain over progress in accountable governance, particularly in the areas of: transparency and access to information, particularly on local level

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expenditure; quality of consultations between government and domestic stakeholders; and the Executive’s accountability to Parliament. These issues can be addressed as part of Tanzania’s important commitment to the Open Government Partnership.

Although the overall rating of the PAF is satisfactory, it is disappointing that after efforts to streamline the PAF there are still so many indicators that are not achieved. This begs the question: Are they not really a high priority for government? Are the timetables unrealistic? Or is it because the capacity to track and measure them remains weak? We need to think how to avoid these problems in the future.

Looking beyond the PAF public financial management remains a critical issue for budget support Development Partners. The recent supervision mission concluded that the programme was making good progress. It is frustrating that the key policy actions in the PAF were not able to mirror this.

2012 has also seen a Budget that is in better shape than it was a year ago and Tanzania seems to have weathered the global economic problems better than many. There has been continued effective dialogue between the GoT and IMF and we welcome the outcome of the PSI/SCF review in July. Its macro-economic and fiscal assessment remains the way we assess one of the most important underlying principles of budget support.

Growth and poverty

Looking forward, a number of critical challenges confront Tanzania. The PSI review highlighted one of the most immediate: the crisis in the electricity sector.

Energy is fundamental to growth, and the continuing crisis is a brake on Tanzania’s development. Sorting out sustainable financing for the sector over the longer term is essential and action is needed urgently.

Over the long term there are huge opportunities presented by the discovery of gas. Managing this resource effectively for the benefit of all Tanzanians will be critical and will have major implications for the Government’s budget. A number of Development Partners are already providing support on these issues and the recent high level mission on Gas sets out some key issues facing the Government and provides an opportunity for all stakeholders, including other Development Partners to provide coherent support to the Government.

Poverty in Tanzania remains stubbornly high despite high growth rates. Tackling this challenge will require action in a number of areas:

Improving the quality of basic services is an important part of a broad based approach to poverty. There has been some progress but it is still limited. Quality of services is poor across much of the country – and systems for managing service delivery are weak and fragmented. In education only 58% pass the primary leaving exam, and only 10% pass the lower secondary exam. Access to water is too low, even in Dar only 51% have access to clean and safe water. Given that 29% of the budget goes on basic services, ensuring they represent good value for money remains central to our dialogue with Government.

74% of Tanzanians live in rural areas and are dependent on agriculture. Agriculture still represents the best opportunity for reducing rural poverty in Tanzania and is one of the Government’s top priorities. Increased growth in agriculture is badly needed. Past progress has been slow, but things are starting to change with a new partnership between the State and the private sector. Although still early days we can see the vision in areas like the Kilombero valley where a mixture of public policy, private investment, and diversification are creating jobs for the rural population.

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Getting agriculture more effectively represented in the PAF would help to focus the dialogue on real priorities.

Finally, while agriculture remains central to any poverty reduction strategy, urbanization is happening even faster all around us. Dar es Salaam is now one of the fastest growing city in Africa! Effective cities deliver enormous benefits in terms of increased jobs and productivity. Dar es Salaam, Mwanza and others have the potential over the coming decade to boost growth and poverty reduction. But this kind of change requires well thought through public investment decisions.

Results and the longer term

To meet these challenges the Government recognizes the need to transform ideas and policy into implementation and results. It is committed to developing a new and exciting approach to the delivery of results by learning lessons from successful approaches adopted in Malaysia and other countries.

We look forward to hearing more about this Big Fast Results Now! approach later on today. If this new approach enables the Government to sign up to a clear set of sequenced results, with clear accountability to deliver within different parts of Government, then the PAFs of tomorrow are already drafted. We welcome the opportunity to align ourselves behind a more focused set of Government priorities, and focus our dialogue on the Government’s own achievable priorities for implementation and delivery - particularly important as the proportion of assistance subject to performance indicators increases (to as much 50% in some cases).

The partnership

Finally, six months into my role as Chair of the budget support group we are clear that dialogue processes around budget support are not optimal. We have, however, made some progress in bringing about change. We have agreed that we will replace the range of underlying processes monitored in the PAF by a shared assessment of the long established underlying principles2 of budget support, such as the respect of human rights and the rule of law which are becoming more prominent as a foundation of the budget support partnership. This should reduce transaction costs and increase transparency. Development partners are also working at the request of Government to harmonise their performance tranche assessments. This should help focus and strengthen our dialogue.

In addition, we are fortunate that we’ll be hearing from the evaluation team later on today – interim findings we know – but they should nonetheless be able to give us some useful ideas on how to make budget support a stronger instrument. A more effective dialogue is one of the critical areas for change. We are determined that we should build on these lessons and on the opportunity provided by the Government’s new delivery approach to improve the way we work together. We hope that this annual review will be able to agree how we can jointly take forward an agenda of radical change over the coming months which will be mutually beneficial.

2 Underlying principles of GBS for this partnership arrangement:(i) Continuing sound macroeconomic policies and management;(ii)

Commitment to achieving MKUKUTA II objectives and Millennium Development Goals;(iii) Continually strengthened budgeting and public

financial management systems; (iv) Continuing peace and respect for human rights, the rule of law, democratic principles, and the

independence of the judiciary; and (v)Good governance, accountability of the Government to the citizenry, and integrity in public life,

including the active fight against corruption in accordance with the laws of the United Republic of Tanzania.

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ANNEX 4

OPENING SPEECH BY HONOURABLE DR. WILLIAM A. MGIMWA (MP), MINISTER FOR

FINANCE, AT 2012 GENERAL BUDGET SUPPORT ANNUAL REVIEW 19TH NOVEMBER

2012 AT THE NATIONAL COLLEGE OF TOURISM, DAR ES SALAAM

Hon. Ministers


Excellencies Ambassadors and High Commissioners

Excellencies Resident Representatives

Heads of Development Cooperation

Government Officials

Members of the Media

Invited Guests


Introduction

1. We meet here today for the 2012 General Budget Support (GBS) Annual Review, an

important event that provides opportunity for the Government and DPs to discuss issues of

common interest and cordial for the development of Tanzania. I feel greatly honoured,

therefore, to have this opportunity to officiate the opening this year’s GBS annual review

meeting. I welcome you all. The large number of representatives from the Government and

Development Partners present at this annual review is clear testimony of the importance we,

as development stakeholders, attach to this event. I am very much encouraged and would

like to thank you for your time and presence.

2. Excellencies, Ladies and Gentlemen, the GBS annual review event is an important

requirement of the Partnership Framework Memorandum that we signed on in May 2011. It

is intended to provide an opportunity for the Government and the GBS partners to assess

Government and GBS partners’ performance in implementing our mutually agreed

commitments that are considered essential for Tanzania’s growth, development and poverty

reduction. The experiences of the past years’ annual reviews have proved to be very

beneficial in various aspects. With these reviews, we have been able to assess our

performance against the agreed set targets. We have also been able to identify areas of

strengths, weaknesses and challenges, thus enabling the Government to take appropriate

actions to tackle them. These events have also helped us to strengthen our dialogue in

advancing the country’s development agenda.

3. Excellencies, Ladies and Gentlemen, Much work has gone has gone into

preparations for this event. I would like to take this opportunity to thank all Government

officials and Development partners who have worked tirelessly to make this event possible.

Let me assure you that the Government and the People of Tanzania value your time and

contributions to this country’s overall development efforts.

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4. Excellencies, Ladies and Gentlemen, I would like to commend the sector and

cluster working groups for their outstanding work during the year. Through this work we have

been able to monitor implementation of the 2012 GBS Performance Assessment Framework

(PAF). Let me also commend the Joint GBS Secretariat for the support and guidance to the

sector and cluster working groups, and for the logistical arrangement of this event. I also

wish to commend the good work done by the Troika Plus, under the able leadership of Mr.

Ramadhani Khijjah, Permanent Secretary - Ministry of Finance and Mr. Marshall Elliot, Head

of DFID in Tanzania and Chairperson of the GBS Donor Group in Tanzania, for guiding the

2012 GBS annual review cycle. I wish to thank them earnestly for their able leadership and

demonstrated high level commitment. Last, but not least, I commend the joint strategic PAF

team for their work and effort to make the 2013 PAF even more focused, result oriented, and

for making it more relevant and better aligned to the country’s needs. It is important that we

commit ourselves to what is achievable, easy to measure and monitor.

5. Excellencies, Ladies and Gentlemen, among the key issues that were identified

and agreed upon at the last year GBS annual review include: linking tangible results to the

GBS’s Performance Assessment Framework (PAF), reviving the Public Expenditure Review

(PER) process as a tool for strengthening budget management and systems that aim at

promoting accountability and efficiency in the utilization of public resources; as well as

continuing with strengthening of public financial management systems. I am pleased to note

that jointly, we were able to put in place the Result oriented and Multi-year Performance

Assessment Framework, whose 1st annual assessment form part of today’s discussions,

along with emerging issues in response to developments that have evolved since the last

annual review. I want these efforts be sustained as we jointly envisage making PAF a

powerful instrument to delivering key results in our priority areas. I also understand that

commendable progress has been made to revitalize the PER process as committed last

year. I am informed that the Champion Group has been formed consisting of Key Senior

Government officials and the joint permanent PER secretariat has been reconstituted with a

dedicated team to coordinate and ensure delivery of the agreed commitments. I hope that

these efforts will be sustained to ensure the PER process becomes our vehicle for key

decisions and policy choices for better management of public financial resources.

General budget support and performance assessment framework

6. Excellencies, Ladies and Gentlemen, I wish to reiterate my Government’s

position that General Budget Support is the Government’s preferred modality for providing

official development assistance to Tanzania. This is because GBS gives the Government full

ownership over resource allocation in line with national priorities for the implementation of

the MKUKUTA and other national policies, strategies, plans and programmes. Furthermore,

GBS is consistent with the Constitution of the United Republic of Tanzania, Chapter 7,

Articles 135 and 136, which provides for the control of public finances. The Article states that

all Government finances must be deposited into the Consolidated Fund and be appropriated

by the Parliament. It is also in line with the Public Finance Act No. 6, 2001, Part II on the

control and management of public finance, which states that the Parliament should maintain

control over public money. By making full use of the national budget process for resource

allocation and spending, as well as the national systems and procedures for procurement,

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accounting and auditing, it contributes to strengthening national capacities. GBS helps also

to reduce transaction costs and facilitates harmonization among Development Partners, as

all GBS Partners use a single system/ process for dialogue, review and assessment.

7. Excellencies, Ladies and Gentlemen, let me use this opportunity, therefore, to

request our Development Partners to continue using the GBS modality and to increase the

GBS share in their portfolio. The Government on its part will continue to strengthen its

systems and processes for ensuring that the funds received are effectively allocated,

managed and accounted for in support of the country’s growth, development and poverty

reduction efforts.

8. Excellencies, Ladies and Gentlemen, the experience of the last two financial years

reveals, however, that the GBS modality is facing some challenges which need to be

addressed if it is to remain a long term predictable financing instrument. We are witnessing

signs of non-adherence to the agreed commitments and principles as laid out in the

Partnership Framework Memorandum (PFM). This has seriously affected the disbursement

schedule. Over the past few years our GBS Partners have not met the agreed commitments

of frontloading 95% of commitment in the first quarter. This causes a huge challenge on the

Government side as far as implementation of the Budget is concerned. I pray that this trend

should not be encouraged. As of today, for example, GBS disbursement for FY 2012/13 is

only 70% against the agreed target of 95%. In the spirit of partnership, let us identify and

address the challenges that the GBS modality is facing.3

9. Excellencies, Ladies and Gentlemen, as I have stated earlier on, the GBS annual

review is intended to provide an opportunity to the Government and GBS-DPs to assess

their respective performance in implementing the mutually agreed Performance Assessment

Framework. I have been made to understand that the 2012 GBS-PAF performance is

encouraging despite the challenges encountered. We have, however, to aim for higher

performance as we move forward. Let us take this as a challenge and work to achieve

higher result in 2013.

10. Excellencies, Ladies and Gentlemen, the message we get is that, we need to

undertake sufficient scrutiny of the actions we propose before committing ourselves. Equally

important is the need to have a few actions and indicators in order to make meaningful

impact. Following the 2010 GBS annual review, the Government and Development Partners

agreed to revisit the PAF, in substance and structure, to ensure that the PAF is results-

oriented, and with fewer but strategic actions and performance indicators. The 2011 GBS-

PAF was the first such joint output and has shown some success. The Government and its

Development Partners should continue to work on the PAF to ensure that the GBS-PAF

2013 is more focused and results-oriented, and better aligned to the country’s growth and

development agenda.

3 This statement is clarified in the Joint Statement Press Statement - Annex 8

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Public expenditure review and public financial management

11. Excellencies, Ladies and Gentlemen, the Public Expenditure Review has

continued to be an important tool for strengthening budget management, and in ensuring

efficiency and transparency. This has been done in the context of MKUKUTA

implementation, carried out in a participatory manner, involving all stakeholders. The overall

objective has been to provide avenue for all relevant stakeholders in growth, development

and poverty reduction issues to effectively engage in open dialogue; particularly as we

address issues of budget management, control and accountability. It has, therefore, helped

Government in identifying priority areas and directing resources towards them.

12. Excellencies, Ladies and Gentlemen, over the last year the Government has

undertaken efforts to revive and strengthen the PER process and provide space for it to play

its role effectively. A joint task force with membership from Government and Development

Partners was constituted. A PER retreat was convened where four analytical papers were

presented and discussed. The conclusions reached at the retreat provided some inputs to

the Plan and Budget Guidelines Committee.

I would like to reiterate the Government’s commitment to further strengthen the PER process

so that it continues to provide a basis for relevant dialogue on budget issues, involving

Government, civil society, academia, private sector, research institutions and DPs; as well

as to provide the comfort needed in supporting the GBS as a preferred modality. It should

also significantly contribute to the Government’s capacity to analyze budget issues, and to

strengthening its capacity in budget management.

13. Excellencies, Ladies and Gentlemen, I believe you are aware of the Public Finance

Management reforms the Government has undertaken since the mid-1990s. PFM is among

the priorities of the Government with the objective to achieve a high level of public service

delivery and reduction of poverty. The PFM Reform Program will, therefore, continue to

guide the reforms in this area with a view to strengthen the public financial management

system in the country. The PFMRP Phase IV, which was launched in June this year, will be

implemented in a span of five years, covering revenue management, planning and budget

management, budget execution, transparency and accountability, budget control and

oversight, change management, and programme monitoring and evaluation. The

Government is committed to effectively implement this programme and we thank you for

your support.

Other national issues

14. Excellencies, Ladies and Gentlemen, since last year’s GBS annual review, a

number of other issues of national importance have occurred. I would like to share with you

some of these political, social and economic developments. First, is the population and

housing census which successfully took place from 26th August to 7th September 2012. The

household Income and Expenditure Survey is also on track. The survey started in October

2011, and the report is expected in July 2013. This will assist in establishing the status of

income poverty.

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15. Excellencies, Ladies and Gentlemen, in August 2010 the parliament passed the

Public Private Partnership (PPP) Act No. 18 of 2010 to provide room for private sector

participation in public infrastructure investments. With the completion of PPP Regulations, it

is expected that some key infrastructure projects will be implemented through Joint Venture

arrangements between the Government and Private Sector. The government has already

initiated joint venture negotiations with power generation investors for the following projects:

Mtwara 300 MW, Mpanga 144 MW, and power transmission projects of 400 KV for Morogoro

– Tanga – Kilimanjaro – Arusha (682 kms) and expansion of the North West Grid for Kagera,

Kigoma and Rukwa Regions (1000 kms). Similar efforts will be initiated in other sectors. We

welcome the private sector from your countries to take advantage of this arrangement and

participate in joint ventures in Tanzania.

Conclusion

18. Excellencies, Ladies and Gentlemen, after those remarks, let me now take this

opportunity to declare the 2012 GBS Annual Review meeting officially opened. I wish you

fruitful deliberations.

I thank you for your kind attention.

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ANNEX 5

PRESENTATION OF 2012 PAF IMPLEMENTATION AND PAF 2013

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46

47

ANNEX 6

PRESENTATION ON NEW BUDGET CYCLE

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49

50

51

ANNEX 7

PRESENTATION ON RAPID BUDGET ANALYSIS

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53

54

ANNEX 7 (Continued)

GOVERNMENT RESPONSE TO THE RAPID BUDGET ANALYSIS

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ANNEX 7 (Continued)

GOVERNMENT WRITTEN RESPONSES TO THE RBA 2012

A: GENERAL ISSUES

The Government of the United Republic of Tanzania appreciates for commendable analytical

work which has been done by the World Bank in collaboration with other development

partners since we introduced this consultative process through the Rapid Budget Analysis

(RBA). The RBA has been addressing both revenue and expenditure issues which the

government has been considering with high attention, as inputs for the next budget process.

All challenges and proposals raised through the RBAs from time to time have enabled the

government to improve the preparation and execution of plans and budget, service delivery

and monitoring and reporting from various stakeholders.

In the RBA for 2012, broad issues raised include low execution rate which affected

implementation of planned activities, shift of the budget to finance infrastructure, off-budget

expenses, increased tax emption, increased government borrowing from pension funds,

inequality in resource allocation among LGAs, as well as monitoring and evaluation of public

resources. The government takes note these challenges and proposals positively and will

continue to consider during the preparation and implementation of budget in the medium

term.

B: SPECIFIC ISSUES

Planning vs. Execution: Over the past few years, the gap between approved and executed

expenditures has been increasing, however economic, social, and infrastructure ministries

have proportionally suffered more than ‘administrative’ ministries.

Government budget is executed based on resource availability (cash based budget).

However, release of funds for infrastructure ministries was on the average of above

80% as shown in table No.12 of the synoptic note. The underfunding was caused

mainly by un released foreign funds, especially for Ministry of Water.

In 2011/12, the execution of many projects in economic, social and infrastructure

ministries were low due to procurement procedures.

Off-budget expenses: An increasing share of public money is managed outside of the central

government.

This issue is noted as attributed by government guarantees.

The government has stopped issuance of guarantees for one year to pave the way

for detailed evaluation of previous guarantees so as to come up with modality of

managing the off-budget expenses.

The government will make follow-up of IMF advice of effective management of off-

budget expenses.

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Expenditure cuts in 2011/12 – affected some sectors including transfers to LGAs which

might have impacted services delivery especially education and health. (Para 16 - 18)

The government is implementing PSI programme under the IMF as acknowledged n

by the presenter in the recent macro-fiscal developments.

The budget cut for 2011/12 was necessary in order to comply with IMF and WB

advice on reducing budget deficit from 6.5% to 5.5% of GDP for ensuring

macro/fiscal sustainability.

Likewise, the budget was affected by addressing unforeseen expenditures mainly on

implementing the emergence power plan.

The government is taking measures to avoid the unnecessary expenditure cut in

future.

The level of execution of development expenditure was relatively low as the result of the

fiscal adjustment and persistent bottlenecks at different level of chain of public expenditures.

(Para 20)

This challenge is mainly attributed by foreign inflows which are channeled direct to

projects. The government has introduced an Aid Management Platform (AMP), which

captures foreign inflows (D-Funds).

DPs are advised to honor their commitments, post respective support through AMP

and increasing their support through the exchequer system.

Delays in release of development as well as built-up of arrears was again experienced in

2011/12. About half of MDAs development funds were released during the last quarter of

fiscal year, with more than 36 percent being during the last month of FY (Para 21)

Sources of development financing include: 5% of domestic revenue; domestic

borrowing (1% of GDP); non-concessional borrowing; and external funds (Basket,

project funds, D-Funds).

There are some difficulties (i.e, negotiation process and borrowing procedures) to

access non-concessional loans, which in 2011/12 were accessed during the last

quarter. For the case of D-Funds, most of data have been declared during the fourth

quarter.

As a way forward, the government will start early the negotiations in line with new

budget cycle. Likewise, DPs are urged to post their support on AMP soon after

release of such funds.

Infrastructure maintenance continues to receive limited attention, except for roads. The

share of infrastructure maintenance in the 2012/13 is projected to remain flat at around 3

percent of total budget. While there are some allocations for roads maintenance in the

2012/13 budget there is virally no allocation for maintenance of social infrastructures

especially in education health sectors. (Para 31).

This issue is noted. The government has been allocating resources for maintenance

of infrastructure across sectors at different levels.

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However, there is a challenge of capturing those data due to budget classification at

different levels. E.g. Funds that have been allocated to public institutions and LGAs

are captured as line item of transfers which includes maintenance budget.

Spending on public debt and general services increased significantly in 2011/12. (Para 42)

This issue is noted. The increase resulted by payment of due debts from previous

loans.

New government initiative to finance infrastructure development projects through

non-concessional loans with short maturity period which requires government to start

repayment of such loans in short period.

Available data on actual local government expenditures continues to inhibit detailed analysis

of local government expenditures. Transparency of LGAs expenditure continues to be limited

for two reasons: (i) inclusion of LGA budgets in regional votes especially with regards to

releases and (ii) lack of transparency on the planning and expenditure of carry-overs. (Para

51)

With effect from 1st July, 2012, 133 LGAs started to use Epicor/IFMS for revenue

and expenditure. Thus, data on actual LGAs expenditure can be accessed.

Likewise, carry-over balances will be entered into the IFMS as part of revenue for

new financial year and respective expenditure will be reflected.

Inequity in resource allocations among LGAs continues and is impacting service delivery.

(Para 52).This issue is noted. The government is reviewing formulae used in allocation of

resources to LGAs.

Health sector foreign funding is highly under estimated due to large off-budget funding

(paragraph 85). This issue is noted. The Government will continue to persuade DPs to

channel their budget support through the exchequer system.

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ANNEX 8

PRESENTATION ON BIG FAST RESULTS NOW!

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62

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ANNEX 9

PRESENTATION ON GBS INDEPENDENT EVALUATION PRELIMINARY FINDINGS

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67

68

69

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ANNEX 9 (Continued)

BRIEFING NOTE TO INFORM DISCUSSIONS DURING THE GBS ANNUAL REVIEW

SESSION ON THE BUDGET SUPPORT EVALUATION

Context:

This Briefing Note provides a summary of some preliminary findings of the consultancy

team on the on-going budget support evaluation, for the purpose of presentation and

discussion at the Budget Support Annual Review on the 19th of November 2012. It needs to

be stressed that these are preliminary findings of the consultants, and are subject to

modification and refinement in the light of additional data and analysis. It is important to

stress that the management team has not analysed and commented on the findings.

Furthermore, the findings included in this brief are only partial, and the scope of the

evaluation goes far beyond what will be covered in the presentation of the lead evaluator,

Andrew Lawson. The management committee has guided the consultant to focus the

presentation on two specific areas – flow of funds, with a particular focus on results in the

education sector, and policy dialogue – in order to facilitate discussions at the Annual

Review. The presentation is likely to include feedback on the consultancy team's preliminary

recommendations in relation to the design and management of Budget Support. Information

on the methodology and timeline of the evaluation is annexed.

Partial and preliminary findings/recommendations of the consultancy team:

Preliminary findings of the consultancy team suggest that Budget Support has had an

important “flow of funds” effect, which have facilitated the expansion of public spending

in the Mkukuta priority sectors, with consequent benefits for the improved coverage of

social services and the improved maintenance of the road network.

Budget Support disbursements during the period were substantial both in fiscal terms, where

they represented on average 13.7 % of public spending over the seven year evaluation

period, and as a proportion of ODA, where they comprised an average of 37.5 % of ODA.

Secondly, total annual disbursements were predictable; indeed they were generally in

excess of the amounts projected by the BSG members at the conclusion of the annual

review process. However, although quarterly disbursements were broadly consistent with

projections at the beginning of the evaluation period, over 2009/10 and 2010/11, quarterly

disbursements have been subject to more substantial delays (of 3-6 months), which may

have created problems for treasury management.

In terms of the use of funds, the consultants conclude that given the scale of Budget Support

and its discretionality –a significant part of the increases evidenced during the

evaluation period in respect of non-salary recurrent spending, internally financed

Development spending and in staff numbers within the health and education sectors

were made possible by the Budget Support transfers. They also noted that these

increases accrued predominantly to the six priority sectors identified in Mkukuta.

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In terms of the application of these funds within the priority sectors, the consultants suggest

that a major expansion in the coverage of primary and secondary education has been

achieved, as well as a significant improvement in the size and the quality of the

national road network. The Tanzania 2010 Demographic & Health Survey also attests to a

range of improvements in the water and health sectors since the 2005 survey. While some of

these would seem more obviously related to programmes funded through the Global Fund or

GAVI (such as the rise in vaccination coverage, the vast increase in HIV testing, the

increased use of insecticide-treated bed nets), the improvement in the proportion of

households using a protected water source (from 49% to 57%), the increased coverage

of post-natal care, the reduction in respiratory infections in children and their more

frequent treatment are all results, which are likely to have been significantly supported

by the expansion in the GoT budget for these sectors, and thus by Budget Support.

The consultants recognise that problems of quality, equity and efficiency in social service

delivery remain, while they indicate that there is nothing to suggest that these are any more

pronounced than they would be in other countries at a similar stage of development of the

network of public service provision. Moreover, the consultants indicate that there are signs –

at least in the education sector, of appropriate policy responses to such problems.

While recognising that good results have been achieved through GBS, the consultancy team

has identified challenges in the quality of policy dialogue. The evaluators recognise that

stakeholders in Tanzania have been aware of these weaknesses for some time and have

started to introduce some corrective measures.

The evaluation team suggests that there are four inter-related weaknesses with the current

structures for performance assessment and policy dialogue:

- a lack of adequate Government ownership and leadership, largely prompted by the DPs’

increased recourse to the use of Budget Support as “policy leverage”;

- high transaction costs;

- technical weaknesses in the definition of performance indicators and targets; and

- A lack of a strategic, problem-solving orientation within the dialogue process.

While the evaluation report will come up with recommendations on how to address the

challenges and make general budget support into an even more effective tool in support of

development in Tanzania, the following preliminary recommendations4 of the consultancy

team are likely to be presented by Andrew Lawson during the annual review as suggestions

for how the stakeholders could already start addressing together the weaknesses identified:

i. Consider introducing a formal separation between the assessment of the

disbursement conditions for the fixed tranches of Budget Support and the

wider assessment of progress with the implementation of Mkukuta and related

sectoral and thematic reforms. The former should depend essentially on fulfilment

of minimum conditions related to macro-economic management, commitment to

4 The presentation of the independent evaluation team is yet to be finalised. Hence the

preliminary recommendations of the team, listed in this document, may well be revised and expanded in the presentation that will be delivered.

72

Mkukuta, implementation of PFM reforms and transparency in budget reporting, as

well as respect for the underlying principles, agreed in the Partnership Framework

Memorandum.

ii. In order to avoid conflicts of interest and ensure a more streamlined assessment

process, the assessment of the core conditions for the disbursement of the

fixed tranche should be undertaken through an annual, independent,

professional process whose findings would provide the basis for the individual

disbursement decisions of each Budget Support provider. This would be a

single unified process, which would draw on the conclusions of the IMF PSI review,

as well as the results of PEFA evaluations and other such independent assessments.

iii. As part of this process, or in parallel, a formal annual or perhaps two-yearly

independent assessment of compliance by DPs with their commitments under

the Partnership Framework Memorandum should also be undertaken.

iv. The Government of Tanzania should take the lead in defining a set of service

delivery targets and policy implementation targets for Mkukuta and for the

related sectoral and thematic reforms. The disbursement of the fixed, base

tranches of Budget Support would not depend upon progress in these areas,

although the disbursement of performance tranches would. In order to protect

Government ownership over these processes, the DPs providing performance

tranches would need to commit to make adaptations to the design of these

arrangements, where appropriate.

v. Support should be provided to Government in order to assist with this

reformulation of the assessment and dialogue process. Its precise format would

need to be decided by Government but it might conceivably take the form of direct

long-term TA support to the Budget Support secretariat within the Ministry of

Finance, combined with high-level intermittent support from short term TA. Training in

the design and monitoring of performance indicators should probably be provided

too.

vi. A formal strategy should be developed to reduce Transaction costs and to keep

control of them in future. This is likely to mean the elimination of the cluster level from

the framework of dialogue. It might also entail a formal examination of the processes

and procedures utilised for making assessments, distributing analytical reports,

undertaking consultations and reaching decisions, so as to permit some streamlining

(or business process re-engineering) of these functions.

The Evaluation Process: Methodology and Timetable

The evaluation is following the “3-step” methodology, which has been established for the

evaluation of Budget Support by the OECD-DAC5. Steps One and Two of the analysis have

been undertaken simultaneously over the course of the desk phase and the main field

mission. However, they have not been fully completed, pending receipt from the Ministry of

Finance of the full set of fiscal data for the period, and pending finalisation of the data

analyses foreseen within the evaluation, including notably the econometric analysis of

education sector outputs and outcomes. Step Three, consisting of the synthesis of the

5 Details of the methodology are available at

http://ec.europa.eu/europeaid/how/evaluation/evaluation_reports/2008/budget_support_en.htm.

http://ec.europa.eu/europeaid/how/evaluation/evaluation_reports/2008/budget_support_en.htm

73

results of Steps One and Two, will be undertaken in late November after completion of the

analyses pending. Thereafter, the results of the evaluation will be written up, reviewed with

the Reference Group and Management Group, and then finalised.

Final results will be presented in February 2013 at public seminars in Dar es Salaam and in

Europe. Feedback will be incorporated into the Final Evaluation Report, which will be

available for full public dissemination from March 2013. The key elements of the work plan

and the current stage within this process are shown below:

Evaluation Timetable

Preparatory Mission ........................................................... 13th – 24th, February 2012

Inception Report ............................................................................. 30th, March 2012

Fact finding & data collection mission ......................................... 3rd - 12th, May 2012

Desk Report........................................................................................ 20th July 2012

Main Field Mission .......................................... 24th, September – 10th, October 2012

Field phase presentation .............................................................. 8th , October 2012

Presentation of Preliminary findings at Annual Review...…………19th, November

2012

1st draft Final Report .............................................................. 14th, December 2012

2nd draft Final Report (incorporating comments from Mgt. & Ref. Groups)28th, January

2013

Dissemination seminars in Tanzania & Europe .................................. February 2013

Final Evaluation Report ................................................................... 15th March 2013

74

ANNEX 10

CLOSING STATEMENT AT THE 2012 GBS ANNUAL REVIEW BY

MARSHALL ELLIOTT, HEAD OF THE UK’S DEPARTMENT FOR INTERNATIONAL

DEVELOPMENT AND CHAIR OF THE BUDGET SUPPORT GROUP OF DEVELOPMENT

PARTNERS IN TANZANIA

Honorable Minister of Foreign Affairs

Honorable Minister of Finance


Ambassadors


1. Our thanks to the Government of Tanzania and my budget support colleagues for a

positive and constructive budget support annual review.

2. PAF 2012: we heard this morning about some the successes of 2012 such as

macroeconomic management, the progress being made on PFM and initial signs of

improving quality in primary education; and also about some of the challenges – we

heard a lot about the urgent need to address financial challenges in the energy sector,

and to closely monitor debt sustainability in relation to non-concessional borrowing

including by parastatals.

3. Much of the discussion today has been about how we can work together more

effectively. We have agreed two new ways of working that will help us finalize PAF 13

in a way that will enhance our dialogue.

First, we have agreed to move to a shared annual assessment of the underlying

principles. Once this is finalized we will be able to remove underlying processes from

the PAF.

Second, budget support donors aim to harmonize performance tranches and triggers

next year and use this to focus our dialogue on three areas for the year ahead. These

areas include sustainable growth – specifically the energy sector (and possibly

agriculture), services at the local level – looking at quality and equity of service

delivery, transparency and public financial management – continuing implementation

of PFMRP, EITI validation, and implementation of commitments made by Tanzania in the

context of the Open Government Partnership. We must agree these critical actions and

indicators by the end of the calendar year so we can move ahead with implementing

PAF 13.

4. It has been really exciting to hear about the big fast results, now! Enhancing

institutional delivery capacity will be fundamental. That said we are ready to bring

everyone together as this emerges in the early New Year. This has the potential to set

75

the framework for our partnership going forwards, and will allow budget support donors

to align behind a clear set of Results for systemic change. If we get clear and real

priorities my expectation is that the PAFs of the future will write themselves.

5. The Evaluation session was useful helping us to think about ways we might better

organize ourselves around a policy dialogue that adds value. A range of useful ideas

were discussed. We must swiftly consider how we use these preliminary ideas to

improve our partnership. Changes are needed and we need collectively to work out how

to work together to agree a new approach. By the end of the calendar year, we need to

have agreed how to take forward joint work on this issue. As GBS Chair and budget

support development partners we will put forward some suggestions on a process to

take this forward. We will also keep wider stakeholders – MPs, civil society, academia

and the media – in the loop as discussions progress.

Asanteni Sana

76

ANNEX 11

CLOSING STATEMENT BY

THE MINISTER FOR FOREIGN AFFAIRS AND INTERNATIONAL COOPERATION,

HON. BERNARD KAMILLIUS MEMBE (MP), AT THE CLOSE OF THE 2012 GBS

ANNUAL REVIEW, 19TH NOVEMBER, 2012

Hon. Ministers;

Excellencies Ambassadors and High Commissioners;

Heads of Development Cooperation;

Members of the Media;

Invited Guests;

Ladies and Gentlemen:

At the outset let me take this opportunity to express my gratitude for the honor to

close the 2012 General Budget Support (GBS) Annual Review. The meeting has indeed

been very productive and successful in addressing our development challenges; that is the

need to register high and broad-based growth that translates into meaningful reduction of

poverty.

This has been possible due to the high level commitment and participation by the

Government and Development Partners. Special thanks go to those who in one way or

another made the event successful. The collaborative effort by the Permanent Secretary -

Ministry of Finance and other Permanent Secretaries, Chair of the Development Partners –

General Budget Support group, Mr. Marshall Elliot and his team, Cluster Working Group

leaders, and the joint GBS Secretariat, all worked very hard to make this event successful. I

commend them all for their tremendous efforts.

Excellencies, Ladies and Gentlemen, it is gratifying to note the impressive progress in a

number of Performance indicators with many of the agreed actions achieved and rated

satisfactory. I want to commend all those who were involved in their implementation and

should aim for even better achievements during the year 2013.

I understand that, the deliberations today have been fruitful and you were able to agree on

key messages as follows:

a) Sustain GBS as Government’s preferred aid delivery mechanism;

b) Enhancing Equity and efficiency in Service Delivery by addressing the remaining

challenges in Pay reforms, particularly implementation of an incentive policy for the hard

to serve areas;

c) Sustaining Macroeconomic Stability and robust Public Financial Management;

d) Ensuring effective implementation of the Big Fast Result Programme;

e) Adhering to the New Budget Cycle and ensuring enhanced predictability of the medium

term framework for both foreign and local funds;

These are important goals that should be pursued vigorously. The Government is committed

and will be able to meet all obligations in order to ensure achievement of these objectives.

77

Excellencies, Ladies and Gentlemen, I am informed and therefore convinced that this

year's Annual Review has been very productive in that it has allowed open and constructive

dialogue between all parties; and has facilitated assessment of critical issues in achieving

the objectives of the national development agenda. The focus on growth and poverty

reduction, including renewed attention on the importance of social indicators to address

equity challenges, is especially relevant, given the short time remaining to meet the

Millennium Development Goals. It is my expectation that the Government and Development

Partners will continue to engage in constructive dialogue, to finalise the PAF 2013. It is the

Government's view that we will further take steps to enhance efficiency in our dialogue

including making sure that the next PAF is simplified, implementable and focuses on

promoting growth and poverty reduction.

Excellencies, Ladies and Gentlemen, Tanzania has made progress in the achievement of

the MDGs. It achieved Goal 2: universal primary education; way back in 2009. It has

registered considerable gains on Goal 3: promoting gender equality and empowerment of

women; and Goal 6: combating HIV/AIDS, Malaria and other diseases. We have also

achieved moderate results on other goals. However, much remains to be done to

emancipate our people from the poverty traps. It is also evident that growth of the world

economy is still very fragile as a result of the financial crisis in Europe.

Excellencies, Ladies and Gentlemen, It is evident that the global economic crisis is far

from over. Many reports are predicting the re-occurrence of the crisis which will certainly

affect the flow of development assistance, trade, FDIs and remittances to developing

countries. Despite these challenges, there is still hope for the future. We have an opportunity

to prevail over the turbulent waves if we abide and work together. This calls for all of us to be

prudent in the use of all available resources in order to deliver results and value for money.

Also I would like to urge our Development Partners to continue supporting us and ensuring

medium term predictability of aid flows.

Excellencies, Ladies and Gentlemen, I am quite confident that the outcome of this year’s

GBS Annual Review are jointly owned by all parties. The Government and Development

Partners will continue to engage in constructive dialogue to finalize some of the outstanding

issues on the 2013 PAF. I understand that the 2013 PAF will be completed within the coming

few weeks. At this stage, I would like to emphasize the need to ensure that the next PAF is

more realistic and consistent with the need to reduce transaction costs and improve

efficiency and effectiveness of development assistance.

Excellencies, Ladies and Gentlemen, with these few remarks, I now have the pleasure

and honour to declare that the 2012 GBS Annual Review closed.

I THANK YOU ALL FOR YOUR KIND ATTENTION

78

ANNEX 12

THE 2012 GENERAL BUDGET SUPPORT ANNUAL REVIEW

JOINT PRESS RELEASE

The Government of the United Republic of Tanzania and its 12 Development Partners

providing budget support successfully completed the budget support annual review dialogue

today the 19th November 2012.

This year’s dialogue endorsed progress in the overall performance in 2012 noting that:

macroeconomic stability has been maintained with the IMF’s PSI programme on track with a

positive PSI review completed in July; more rural roads have improved to good and fair

condition; and iincreased number of births is taking place in health facilities. Substantial

cchallenges remain, notably around targets tracking access to clean and safe water; quality

and equity of social service delivery; accountable governance; access to electricity and the

financial sustainability of the energy sector.

The Government and development partners agreed to enhance the dialogue on results. The

key focus for dialogue next year between Government and development partners will be:

sustainable growth (energy and agriculture), quality of social services at local government

level, and public financial management and transparency. The meeting also heard about the

Government’s new Big Results Now! Agenda which will be strengthening delivery across a

number critical areas: Energy, Oil and Gas, Agriculture, Education, Transport, and Revenue

collection.

In the course of the deliberations it was reconfirmed that GBS remains Tanzania’s preferred

aid modality. GBS Development Partners were thanked for improving their disbursement

mechanism and, for ensuring predictability of budget support in 2012/13 – just under half a

billion US dollars. They pledged to enhance predictability of GBS disbursements on the

basis of a reinforced dialogue In conclusion there was consensus that the continuing

challenge for both partners is to support sustainable growth, which benefits Tanzanian

citizens at large leading to a significant decline in poverty.

Budget support is undergoing an in depth evaluation. Initial findings from the evaluation were

discussed, in particular how Government, development partners and other stakeholders can

better discuss Tanzania’s policy challenges in a forum that adds value.

The outcome from this Annual Review will be reported back to wider stakeholders at the next

Annual National Policy Dialogue in early 2013.

The Development Partner’s GBS Group is made up of 12 Development Partners, 9 Bilateral

and 3 Multilateral: The African Development Bank, Canada, Denmark, the European

Commission, Finland, Germany, Ireland, Japan, Norway, Sweden, the United Kingdom, and

the World Bank.

79

ANNEX 13

LIST OF PARTICIPANTS

GENERAL BUDGET SUPPORT - ANNUAL REVIEW 2012 ATTENDANCE REGISTER 19TH NOVEMBER, 2012 HELD AT NATIONAL

COLLEGE OF TOURISM BUSTANI CAMPUS CONFERENCE CENTRE

William Mgimwa Minister Ministry of Finance

Bernard Membe Minister Ministry of Foreign Affairs and International Cooperation

Janet Mbene Deputy Minister Ministry of Finance

Ramadhani Kijjah Permanent Secretary Ministry of Finance

Dr. Servacius Likwelile Deputy Permanent Secretary Ministry of Finance

Laston Msongole Deputy Permanent Secretary Ministry of Finance

Peter Ilomo Permanent Secretary President´s Office - State House

John Haule Permanent Secretary

Ministry of Foreign Affairs and International Cooperation

Eliakim Maswi Permanent Secretary Ministry of Energy and Minerals

Fanuel Mbonde Permanent Secretary Ministry of Constitution and Legal Affairs

Maimuna Tarishi Permanent Secretary

Ministry of Natural Resource and Tourism

Dr. Philip Mpango Executive Secretary Planning Commission - President´s Office

George Yambesi Permanent Secretary

President´s Office - Public Service Management

K.M Omar Permanent Secretary Ministry of Finance Zanzibar

Joyce Mapunjo Permanent Secretary Ministry of Industries ,Trade & Marketing

Sihaba Nkinga Deputy Permanent Secretary

Ministry of Information, Youth, Culture and Sports

Patrick Magungu Deputy Permanent Secretary

Ministry of Communication, Science and Technology

Shabaani Mnubi Ag. Permanent Secretary Ministry Community Development, Gender & Children

Dr. Yohana Budeba Deputy Permanent Secretary

Ministry of Livestock and Fisheries Development

Claudi Kumalija Rep. Permanent Secretary Ministry of Health and Social Welfare

Sophia Kaduma Deputy Permanent Secretary

Ministry of Agriculture, Food Security & Co-operatives

Uledi Musa Deputy Permanent Secretary Ministry of East African Co-operation

Benedict Njau Ag. Permanent Secretary Ministry of Home Affairs

Eng. Happiness Mgalula

Deputy Executive Secretary President´s Office - Planning Commission

F. Mwandri Deputy Executive Secretary President´s Office - Planning Commission

80

Beno Ndulu Governor Bank of Tanzania

Harry Kitilya Commissioner General Tanzania Revenue Authority

Bedason Shallanda Commissioner Policy Analysis Ministry of Finance

Anna Mwasha Director Poverty Eradication Ministry of Finance

M. K. Mutagwaba Assistant Commissioner Ministry of Finance

Juma Maguru Assistant Director Ministry of Finance

Fatma Kiongosya Director Ministry of Finance

Gabriel Safue Director Ministry of Water

Albina Chuwa Director General National Bureau of Statistics

Kigahe Exaud Director Policy & Planning Ministry of Industries ,Trade & Marketing

Elizabeth Tagora Director Policy & Planning Ministry of Water

Melania Sanga Assistant Director Ministry of Water

Grace Ngallo Director Policy & Planning Vice President´s Office

John Cheyo Assistant Commissioner Ministry of Finance

Jerome Buretta Assistant Commissioner Ministry of Finance

Benedict Daimon Head of Planning President´s Office - State House

E. Maponde Assistant Director Prime Minister's Office

Theresia Msaki Assistant Director


Singi Madata Coordinator Reform Unit President´s Office - State House

Egbert Ndauka Director Policy & Planning Ministry of Education & Vocational Training

Raphael Munola Ag. Director Policy & Planning Ministry of Health & Social Welfare

Matilda Mtenga Director Policy & Planning Ministry of Fisheries & Livestock Development

Richard Mkumbo Director Policy & Planning Ministry of Energy and Minerals

Girake Nkonoki Director President´s Office - Public Service Management

Ahmed Haji Commissioner Planning Commission - Zanzibar

Bihindi Khatib Commissioner External Finance Ministry of Finance - Zanzibar

Ramadhani Mlinga Chief Executive Officer Public Procurement Regulatory Authority

H. Mbise Commissioner for Energy Ministry of Energy and Minerals

Emmanuel Achayo Director Policy & Planning


Mary Faini Assistant Director Ministry of Natural Resources and Tourism

B. A. Mtui Assistant Director M&E Prime Minister's Office - Regional and Local Government

Joachim Otaru Ag. Director Policy & Planning Ministry of Foreign Affairs and International Cooperation

Henry Kandiero Ag. Director Policy & Planning President´s Office - Public Service Management

Basil Kauga Director Policy and Planning Prime Minister's Office

81

Grace Mosha Assistant Director Prime Minister's Office

E. Kasamwa Engineer Tanzania Road Agency

Morrice Oyuke Director National Bureau of Statistics

Teddy Mwaijumba Assistant Director M&E Ministry of Water

Simon Lazaro Ag. Director Policy & Planning Ministry of Land & Human Settlement Development

Mwita Mgeni Commissioner - Budget Section Ministry of Finance Zanzibar

Verdiana Mushi Ag. Director Policy & Planning Ministry of Information, Youth ,Culture and Sports

C. A. Lushiku Director Policy & Planning

Ministry of Community Development, Gender & Children

Joseph Haule Director General Road Fund Board

Omary Khama Personal Assistant - MF Ministry of Finance

A. Meena Assistant Director M&E Ministry of Transport

Melkoir Paschal ` Ag.Chief Accountant/FMGT Ministry of Finance - AGGEN

Dismas Chilala Director M&E LSRP Ministry of Constitutional and Legal Affair's

Prof. H. Magwenga Tanzania Mining Authority Agency

Emmanuel Mayeji Assistant Director Ministry of Constitutional & Legal Affair's

Aziza Ally Head Aid Coordination Ministry of Finance - Zanzibar

Claud Kumalija Director Policy & Planning

Philimina Malisa Assistant Commisioner Ministry of Finance - Aid Coordination

Omar J. Mkima Financial Management Officer Ministry of Finance

Adrian Njau Principal Economist Ministry of Finance

E. Kachenge Secretary Ministry of Finance

Emmanuel Msengi Economist Ministry of Communication Science & Technology

Waryoba .N Economist Ministry of Finance

Scola Malinga Communication Specialist Ministry of Finance

Msafiri Nampesya Personal Assistant - Governor Bank of Tanzania

Felista Rugambwa Senior Security Officer Ministry of Foreign Affairs & International Cooperation

Moses Malipula Financial Management Officer Ministry of Finance

Maguye Maguye Economist Ministry of Finance

Joseph Haule Financial Management Officer Ministry of Finance

Maregeli Mark Economist Ministry of Finance

James Msina Financial Management Officer Ministry of Finance

E.A Mwankenja Ministry of Finance

Alex Mwakisu Financial Management Officer Ministry of Finance

Alex Mpangala Economist Ministry of Finance

Kelvin Mdeme Ministry of Finance

Glory Sindilo Financial Management Officer Ministry of Finance

Kakulu Buchard Financial Management Officer Ministry of Finance

82

Neema Mkwizu Financial Management Officer Ministry of Finance

Mukajungu Kamuzora Financial Management Officer Ministry of Finance

Seo Mutalemwa Economist Ministry of Finance

Lelansi Mwakibibi Ministry of Finance

Amina Shaabani President´s Office - Planning Commission

Awezae Juma Procurement Policy Analyst Ministry of Finance

Athumani Msabila Financial Management Officer Ministry of Finance

Sayi Nsungi Ministry of Finance

Harrieth Chamuriho Ministry of Finance

Malima Nkilijiwando Head Planning Unit Ministry of Finance - National Audit Office

Vicky Jengo Ministry of Finance

Michael Nyagoga Sen. Financial Management Officer Ministry of Finance

Andrew Lawson GBS Evaluation Team Leader FISCUS

Prof. Samuel Wangwe Facilitator REPOA

Johannes Sein Rapporteur REPOA

Prosper Buchafuo

Tonia Kandiero Resident Representative AfDB

John Moore Acting Ambassador Canada

Johnny Flentø Ambassador Denmark

Marshall Elliott Head DfID DfID

Filiberto Ceriani Sebregondi Head of Delegation European Commission

Sinikka Antila Ambassador Finland

Klaus-Peter Brandes Ambassador German

Thomas Baunsgaard Resident Representative IMF

Fionnuala Gilsenan Ambassador Ireland

Masaki Okada Ambassador Japan

Yukihinde Katsuta Head of Development JICA

Ingunn Klepsvik Ambassador Norway

Lennarth Hjelmåker Ambassador Sweden

Philippe Dongier Country Director World Bank

Alberic Kacou Resident Coordinator UN

Patricia McCullagh Head of Cooperation Canada

Steen Sonne Andersen Head of Cooperation Denmark

Eric Beaume Head of Cooperation European Commission

Kimmo Laukkanen Head of Cooperation Finland

Gisela Habel Head of Cooperation German

Gerald Considine Head of Cooperation Ireland

Sato Tomonobu First Secretary Japan

mailto:[email protected]



83

Anne Kristin Hermansen Head of Cooperation Norway

Hajime Iwama Head of Cooperation JICA

Prosper Charle Economist AfDB

Jonathan Arnold Counsellor Canada

Signe Skovbakke Winding Coordination Group Member Denmark

Olivier Coupleux Head of Economic Section European Commission

Rikka Torppa Economist European Commission

Kati Manner Economist Finland

Wolfgang Solzbacher Head KfW German

Chelaus Rutachururwa Coordination Group Member IMF

Fenohasina Maret Economic Advisor Ireland

Yuko Ikeda Coordination Group Member Japan

Mundal Håkon Senior Economist Norway

Johan Kiessling Coordination Group Member Sweden

Richard Moberly Senior Economist Uk/DfID

Jacques Morriset Country Economist World Bank

Emmanuel Mungunasi Economist World Bank

Yutaka Yoshino Senior Economist World Bank

Juho Ushikala Counsellor Finland

Aran Corrigan Senior Governace Advisor Ireland

Samer al Fayadh Energy DP Sector Lead Sweden

Jim Halliday PFM DP Lead Canada

Angus Miller General Budget Support Advisor DfID

Kondoh Yoshisuke JICA

Liz Tayler MDG Team Leader DfID

Stuart Forster Governace Team Leader DfID

Niels Knudsen DPG Secretariat UNDP

Kalle Hellman PFM Secretariat PFM Group

Verena Knippel GBS Secretariat DFID/GBS Chair

Paulina Mrosso GBS Secretariat DFID/GBS Chair

Monkam Daverati French Development Agency

84

ANNEX 14

2012 PERFORMANCE ASSESSMENT FRAMEWORK

END YEAR RESULTS

KEY POLICY ACTIONS CLUSTER 1 Lead

1 Implement intermodal transport measures to ease movement of goods to & from Dar

es Salaam Port

2012: Enhance cargo handling capacity through DSM Port demonstrated by fully

operational Port Community System, increased container throughput (10%) of the port,

advancement in TPA moving towards Land Lord Status and a prioritised investment and

business plan for TRL

2013: Enhance TRL off-take capacity to and from DSM Port demonstrated by procurement

for central line spot improvements and rolling stock purchase finalized, options for

improvement of rail operations within the port identified

2014: Improve access by rail and road to DSM Port demonstrated by reliable rail transport

service restored: TRL cargo volumes to/from DSM port increased by 15%, improving road

access to DSM Port identified, bypass road to the central corridor from the DSM Port

identified, exit and entrance gates to the port of DSM introduced

MoT

Target 2012:

- Port Community system fully operational

- Container throughput increased by 10%

- Funding for the study to identify Critical Path for TPA to move to the Land Lord

Status secured.

- Prioritized investment and business plan for TRL in place

Status:

• Milestone 1: Port community system fully operational - TPA has established a one stop

centre where all public service providers operate on a manual single window basis under

one roof. This is a temporary arrangement before establishing an electronic single window

operation, i.e., Port Community System. The procurement for the latter, retendered for

technical reasons, is still under way. It takes some time to develop a Port Community

System, up to two years according to some. Milestone 1 will not be reached this year. It

should be noted that the one stop centre, inaugurated in July 2011, has met with some

success in streamlining port procedures and has contributed to reducing dwell time from 12

days to 9 days in one year.

• Milestones 2-4: Two are met and one is on track but will miss the timing. Overall

assessment this year is border line.

85

KEY POLICY ACTIONS

ACHIEVED

2 Formulation of energy subsidy policy by August 2013

2012: Analytical study forming basis for drafting of an energy subsidy policy finalized by

September 2012

2013: Energy subsidy policy proposal completed by MEM by September 2013

2014: New Energy subsidy policy in place by October 2014

MEM

Status 2012:

The consultants presented an Inception Report on 27 August, 2012. In that report the

consultants indicated a tentative deliverable schedule for 4 further reports as follows. The

first interim report was delivered on 21 September covering issues of: (i) defining and

measuring access and (ii) a review of power sector demand and supply. The second interim

report will be delivered on 28 October covered issues of: (i) customer willingness and ability

to pay, (ii) review of current subsidy mechanism, and (iii) effectiveness of the current

subsidy mechanism. The third report expected in December will deals with issues of: (i)

constraints to the expansion of electricity access, (ii) a cross-country comparison of best

practices in subsidy systems, and (iii) recommendations for a comprehensive, economically

rational, and commercially sustainable subsidy policy. A fourth and final report will be

delivered within two weeks of the receipt of comments on the Draft Report. This is likely in

January 2013.

MEM will use the study to inform the preparation of its proposals for an energy subsidy

policy which are, according to the PAF targets to be complete by end September 2013 and

an energy subsidy policy is to be in place by September 2014. Although the delivery of the

deadline for the final stage of documentation of stakeholders’ inputs set in the PAF for 31

August is likely to be missed by 4 months, delivery of a draft report in December still allows

time for MEM to factor in the analysis and recommendations of the study in its policy review

for the preparation of the Medium Term Expenditure Framework for the 2013/14 budget

year and beyond. In addition it should still be feasible for MEM to complete its proposals for

an energy subsidy policy by September 2013 as required for PAF 2013 assesment.

ACHIEVED

86

KEY POLICY ACTIONS 3 *Implementation of natural resources decentralization to districts and communities

2012: Increase the number of declared forest reserves on village forest land by 40, number

of signed joint management agreements by 16, authorised associations among wildlife

management areas by 3, registered beach management units by 10

2013: Increase the number of declared village land forest reserves by 70 and signed Joint

management agreements by 32, authorised associations among wildlife management

areas by 3, and registered beach management units by 10

2014: Increase the number of declared forest reserves on village forest land by 80 and

signed joint management agreements by 40, authorised associations among wildlife

management areas by 3, and registered beach management units by 40

MNRT+

MoFD

Status 2012:

Sensitization on involvement of communities in wildlife conservation and establishment of

WMAs, was done in Tunduru, Namtumbo, Kilwa, Morogoro Rural, Rufiji, Serengeti,

Mpanda, Kilombero and Ulanga Districts.

Three CBOs of Chingoli in Tunduru District (G.N 64), Kimbanda and Kisengule in

Namtumbo District G.N 63 and G.N 62 respectively were gazetted to Authorised

Associations (AA’s) and the areas managed by these CBOs became Wildlife Management

Areas on 24th February, 2012.Currently, 26 forest reserves on village land have been

declared in 4 districts (Morogoro rural -10; Ruangwa -5; Mbarali -3; and Mbozi -8).A task

force responsible for revising Joint Forest Management (JFM) guidelines has been formed.

The guidelines especially on cost benefit sharing have been done. Preparations for wide

stakeholders meeting are underway.

For the period between July, 2011 to June, 2012 twenty six (26) BMUs were registered

making a total of 57 registered BMU.

ACHIEVED

4 Put in place integrated land management information system in Northern and

Eastern zones

2012: Geodetic control network containing 700 control points of different levels (CORS 5;

Zero Order Points 10; First Order Points 72 and Second Order Points 613) in place,

homogenized across Tanzania, and fully operational

2013: Consolidation of all relevant information from all 6 sectors’ registries

2014: Integrated land management information system in Eastern and Northern Zones fully

functioning with digitalized records, and trained staff using the new system

MoLHSW

Status 2012:

700 control points are almost in place with ~10% outstanding. The horizontal GBS testing

was completed but still waiting for the vertical GPS. Plans to fully install the Northern and

Eastern geodetic control system are now delayed by about 6 months. To rectify these

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KEY POLICY ACTIONS delays a contract was signed with COWI in July including two phases: phase 1 is full design

of the network by December 2012, and then a further 18 months for implementation. As

this action progressed it became clear that there was insufficient finance (committed by

Development Partners) and the project was initially ‘under-designed’. The reasons for delay

are: aerial work should have started earlier, financial constraints (only received 25% of

expected budget for this project), need to get public understanding for such a project – the

end users will be the public and district authorities. Going forwards the sector partners will

review the criteria in the light of financial and technical obstacles.

NOT ACHIEVED

CLUSTER 3

1 Implement the pay and incentives strategy

2012: Administrative orders issued for facilitating staff in hard to serve areas by October

2012

2013: Pay and incentives scheme incorporated into budget 2013/14

POPSM

Status 2012:

The formal approval of the P&I Strategy has not yet been obtained. Definition of Hard to

Serve Areas - Government has gone beyond a definition to actual identification of thirty

three districts. Moreover, POPSM has completed work with eleven LGAs and is working

with the remaining twenty two Districts/LGAs to develop locally owned and formulated

strategies. Government is also working towards the provision of budgetary resources in

fiscal year 2013-14 to implement some of the incentive schemes. In so doing, Government

has initiated implementation of incentives, a step which is ahead of the target. Despite the

formal asymmetry in the achievement of the two parts of the KPA, it is highly significant that

the government has achieved the more actionable and results oriented part related to the

identification of the districts, the development of local incentive schemes and is pursuing

the provision of budget resources for the implementation of the incentive schemes in FY

2013/14.

ACHIEVED

2 Tanzania validated as an EITI compliant country

2012: Government will produce a report resolving the discrepancies between companies

and GoT that were identified in the TEITI first reconciliation report; and, Tanzania EITI will

submit a second report to the EITI Board addressing the 5 indicators identified by EITI as

being unmet in Tanzania EITI’s first validation report by June 2012

2013: 1) Tanzania is validated as an EITI-compliant country; (2) Domestic legislation

MEM

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KEY POLICY ACTIONS institutionalizing EITI and establishing an enabling framework for EITI’s operation is drafted

and completes stakeholder consultation by October 2013.

2014: (1) Bill of legislation institutionalizing EITI and establishing an enabling framework for

EITI’s operation presented to Parliament (2) Tanzania publishes annual Tanzania EITI

report approved by the International EITI Secretariat by Oct 2014

Status 2012:

The validation committee proposed that Tanzania receives a waiver from conducting a

second EITI validation. As brief background, Tanzania was last validated in 2011 and

declared close to compliant. It had to carry out certain remedial actions and at the same

time made the transition to new EITI rules for becoming compliant which were introduced

last year. Receipt of a waiver means that Tanzania would not have to undertake a second

validation under the new rules but will be reviewed by the Secretariat – if it is deemed to

have met the criteria there will be a recommendation to the Board that Tanzania is declared

compliant, otherwise it will be delisted and have to start the process from scratch again.

After the EITI Board meeting held in Lusaka, Zambia, from 24th to 25th October, Tanzania

was declared as an EITI compliant country by the EITI Board.

ACHIEVED

3 Implement key recommendations from the case flow analysis and roll out of

case/work flow reforms

MOCAJ

Status 2012:

The KPA is on-track. A sub-set of non-legislative recommendations emanating from the

case flow analysis was identified. Originally 32 recommendations were deemed to be non-

legislative. As the work progressed, however, it was agreed that 25 recommendations

were, in fact, non-legislative or ought to be folded together with other recommendations. Of

these recommendations, as of October 2012, 9 were completed (no. 7, 10, 11, 12, 13, 15,

24, 27, 29), 10 were well underway (no. 1, 2, 3, 9, 16, 21, 23, 26, 28, 30), 3 were initiated

(no. 6, 17, 22), and 3 were not yet started (no. 5, 8, 19).

ACHIEVED

CLUSTER 4

1 Interface central and local government ICT with technical control and new software

acquisition, and all new software developed becomes centrally coordinated

2012: ICT mapping exercise showing location and owners of all and peri-financial software,

software functions, outputs and the actual potential data sharing, integration requirements /

opportunities commenced with inception report published by October 2012, showing

commitment to complete the mapping by December 2012.

MoF /

PMO-

RALG

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KEY POLICY ACTIONS 2013: Bring all GoT financial and peri-financial software under one common architecture

with technical support structures. Costed action plan approved by GoT.

2014: Milestones for 2014 to 2016 are taken from approved action plan and jointly agreed

by GoT and DPs

Status 2012:

Engagement of a consultant for the mapping study did not meet the agreed deadline. It is

expected that the inception report will be finalised in early 2013.

NOT ACHIEVED

2 Increase budget transparency and public access to key fiscal information

2012: Guidelines for the preparation of the annual plan and Budget for 2012/13 published

on Ministry of Finance website by May 2012. The Executive Budget proposal as submitted

to the Parliament published by end of June 2012. The Approved Budget is published on

Ministry of Finance website by September 2012. Publish Citizens Budget by November

2012.

2013: A Year-End Report (preliminary budget out turn) wish published on Government of

Tanzania websites by October 2013.

MoF

Status 2012:

The Budget Guidelines for 2012/13 were uploaded on the Ministry of Finance Website. The

Executive Budget Proposal and the Approved Budget for FY 2012/13 were posted on line in

September 2012. The latter three months later than the agreed end June deadline.

The Budget Execution reports for FY 2011/12 for quarter 1, 2, 3 and 4 were posted on MoF

website.

The Citizens’ budget was uploaded on the MoF website as of November 14th 2012.

ACHIEVED

3 Streamline and rationalize national systems and processes for intergovernmental

transfers to LGAs

2012: Review and mapping of the systems and processes for intergovernmental transfers

initiated with inception report finalized by October 2012, showing commitment to complete

the mapping by December 2012.

2013: Comprehensive and sequenced two-year work plan, including a time-bound M/E

framework with defined roles and responsibilities, to address shortcomings of the systems

and processes of intergovernmental transfers finalized by June 2013. Key actions starting

to being implemented by October 2013.

2014: Key actions from the work plan implemented as per M/E framework by October 2014

MoF /

PMO-

RALG

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KEY POLICY ACTIONS Status 2012:

Engagement of a consultant for the mapping study did not meet the agreed deadline. It is

expected that the inception report will be finalized in early 2013.

NOT ACHIEVED

4 The Government enhances domestic tax revenue (tax and non-tax) mobilization with

better transparency and business environment

2012: Submission of a bill to Parliament to enact Tax Administration Act for the purpose of

establishing a common tax procedure among different taxes collected by Tanzania revenue

authority (TRA) by November 2012

2013: Submission Finalization of the study on Non Tax Revenue (NTR) -“Integration and

Harmonization of Revenue Collection Systems” by November 2013. Review the current

system of tax exemptions with the value-added Tax (VAT) regime and amend the VAT Act

with a view to be in line with international best practices by November 2013

2014: Reform local government tax system to improve LGAs’ own source revenue

mobilization by November 2014. Take policy action to improve revenue mobilization from

natural resources sector

MoF

Status 2012:

As a matter of procedure, a Cabinet Paper was prepared and was submitted together with

the draft Tax Administration Act to the Cabinet Secretariat for consideration and approval

before further processing and submission to the Parliament.

NOT ACHIEVED

5 The Government to strengthen institutions of public investment management and

PPPs to ensure that public investments and PPP projects are selected based on

proper economic and financial assessments

2012: Set up the legal mandate of the President’s Office Planning Commission (POPC)

with respect to those of the Ministry of Finance, Prime Minister’s Office, and sector

ministries in planning and managing public investments

2013: Ensure that implementation of economic and financial analysis of public investment

projects is mainstreamed among the MDAs and LGAs based on an operational manual

prepared by POPC. The Cabinet approves PPP finance regulations on government support

and unsolicited bids. Establish operational PPP facilitation fund.

MoF /

POPC

Status 2012:

In the Financial Year 2011/12, POPC finalized a study on “The Alignment of POPC

Functions in the Context of its new Roles”. Findings of the study, among others,

recommended review of Act No. 11 of 1989 which established the Planning Commission.

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KEY POLICY ACTIONS Based on the study recommendations, POPC has prepared a draft schedule of amendment

of Act No. 11 (1989). Currently, the schedule is being shared by stakeholders within

Government.

NOT ACHIEVED

UNDERLYING PROCESS

1. ENERGY SECTOR - SATISFACTORY

The implementation of the Government’s MKUKUTA II is supported by some Development Partners through the provision of General Budget Support in line with principles and terms set out in a Partnership Framework Agreement (May 2011 which include an annual review of GBS support based on a Performance Assessment Framework (PAF). The JESR provides inputs into that annual review. The PAF takes specific account of developments in the energy sector through outcome indicators and temporary process actions. The technicalities of the GBS process are not readily accessible to stakeholders other than MEM and its development partners but they are nonetheless very relevant for the JESR process, not least as they have some influence on perceptions of the performance of the energy sector. This relevance is apparent when one considers that in the 2011 Annual GBS Review,

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made in November 2011, the Energy Sector Review was rated as unsatisfactory. This actually means that the performance of the energy sector was rated as unsatisfactory: it was not an assessment of the quality of the review process. The reasons for the unsatisfactory rating were that one “temporary process action” and two of three “outcome indicators” were not achieved in the timeframe set in the PAF. In addition one outcome indicator could not be assessed. The “temporary process action” was the construction of a 100 MW gas-fired power plant in Dar es Salaam and the Heavy Fuel Oil (HFO) fired 60 MW in Mwanza. Both plants had been originally expected to reach overall completion by end October 2011. The ‘outcome indicators’ were the total electricity capacity installed and the availability of electricity generation capacity in MW and utilization in percentage terms. The 2011 targets had been 1,087 MW of installed capacity and a utilization rate of 85%. Actual capacity availability at the point in time measured for the PAF purposes was 1,220 MW but utilization was at 60%. The outcome indicator that was not assessed was percentage of population with access to electricity. The reason it was not assessed was because “a methodology for defining access was not in place”. (Annual GBS Review 2011:15-16) MEM’s responsibility for timely installation of new generation capacity is one shared with its agency TANESCO but also with the contractors building the plants. Its responsibility for the delivery of the two generation plants is primarily one of ensuring timely and full availability of budget resources for TANESCO to pay for the plants; beyond that it has no control and only an indirect and hard-to specify influence over delivery timing. Delivery of the two power plants was already behind schedule when the 2011 PAF was drawn up. The TPA should have focused on the actions that were required by MEM and its agency to facilitate timely implementation. If that sort of measure is to be used for PAFs there should be much more detailed specification of the necessary actions required of MEM. In infrastructure projects of that sort that means going into the detail of the project implementation plan to find the necessary planning, budgeting and funding actions by MEM and the actions it can and should take in its role as sole shareholder and a board member of TANESCO. The electricity plant utilization rate, especially where hydropower generation is significant, can only very remotely be influenced by MEM, if at all beyond providing budgetary resources for capacity charges and fuel purchases where litigation technicalities and/or TANESCO’s cash flow leave no better immediate alternative. The absence of a methodology for defining access was not a good reason not to assess access to electricity as it improving access is a core goal of energy policy and is a target for both MKUKUTA II and the Five Year Development Plan as well as in MEM’s own Medium Term Plan which has been monitored and regularly reported on. Strictly speaking, the problem for the PAF was that there are various and vague definitions of access being used by different stakeholders and so there is no agreed indicator for the PAF for which a measurement method could be set. In that sense and respect it was the PAF that was unsatisfactory. Indicators should be SMART – specific, measureable, achievable, relevant, and timed. The indicator failed on specificity and measurability. The result should be a PAF TPA to draw up a SMART access indicator. MEM, with

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support from MCA-T, has now commissioned research for this. In addition, during the GBS review the DPs expressed concern that there were significant fiscal risks related to the Energy Emergency Plan.2 There are fiscal risks associated with the EPP, and there the same risks for the sector as a whole: explicit and implicit contingent liabilities from MEM’s agencies and the risks associated with private sector investment in a strategic infrastructure sector like energy. The first step in risk management is risk identification. MEM and its DPs should explore ways to identify the fiscal risks in the sector in consultation with the Ministry of Finance. This is part of good public financial management and would be something that MEM would benefit from in presenting its case to the Cabinet through the planning and budgeting process for budgetary resources that the sector requires for the implementation of policy and the delivery of the national development plan. MEM’s case in making funding requests could be strengthened through reference to the Rapid Budget Analysis (RBA) presented at the Annual GBS Review which indicated that the budgetary allocations for energy were weakly aligned to its policy priority and the lower allocation to energy (in the original 2011/12 budget) may have bad implications for the required growth momentum. (Annual GBS Review 2011:23). The RBA presentation also highlighted the key issue of establishing strategic partnerships with the private sector to fill resource gaps for capital investment and the need to raise more resources for public sector investment from cost recovery tariffs in the energy sector. (Annual GBS Review 2011:23). The PAF for 2012 includes the Energy Sector Review as an underlying process indicator and the assessment criteria have been agreed between MEM and its DPs. It has also set the four steps in formulation of an energy subsidy policy by August 2013 as a Key Policy Action. The outcome indicators for the PAF remain installed generation capacity, plant availability, and population with access to electricity. The Key Policy Action is underway with some slippage in process timing but not to an extent that should delay the desired outcome and ultimate timing. This focus on a policy action is an improvement to the PAF as it relates to the energy sector as it deals with something, which is central to MEM’s mandate and responsibility and entirely within its control and for which it can reasonably be held to account. The outcome indicators remain problematic for the reasons discussed above. Installed capacity should be met. In 2012, total installed capacity has increased to 1,333 MW, but plant capacity was lower at 45%. While this has been pulled down significantly by lower utilization of hydropower generation capacity (largely due to poor rainfall), gas utilization alone is still 71%. Finalisation of a definition of electricity access is unlikely in time for the PAF review. MEM and its DPs should use the opportunity of the stakeholders’ workshop to consider what the appropriate outcome indicators for the sector should be. In terms of the PAF for next year, an obvious and SMART Key Policy Action would be completion of a Gas Policy by MEM by June 2013 with additional steps showing stakeholder consultation processes.

2. EDUCATION SECTOR – SATISFACTORY

To determine rating for the Education Sector, the performance assessment was

conducted jointly by Government and DPs on November 5th, 2012, using the agreed

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rating framework which was approved in the Education Sector Development

Committee meeting held on 20th March 2012. Three key areas were assessed: a)

Finance and budgeting whereby the score was 20.5% out of 22%, b) progress on

agreed targets and results, the sector scored 32.5% out of 60% and c) Accountability

and sector dialogue the score was 9% out of 18%. Based on this rating the total score

was 62% whereby, the Education Sector Performance in 2011/12 was assessed as

SATISFACTORY after reviewing all relevant documentation. Key areas of good

performance included among others the Resource allocation to the Education Sector

remains National Priorities. The share of public spending in the education sector

remains higher than any other economic sector. The share of expenditure allocated to

education sector as percentage of total budget in FY 2011/12 was 16.90%. Finalization

and approval of the Adult Education Development Plan, unit cost study for higher

education and conducted Human Resource Situational Analysis finalised.

3 ACCOUNTABLE GOVERNANCE – UNSATISFACTORY

Accountable governance is a broad thematic area with a range of components and multitude of stakeholders’ views to consider. This makes it a challenging area to assess. The development of specific, assessment criteria in year 2011 is a notable achievement. To conduct assessment of the DPs and GoT jointly agreed on the following assessment criteria during 2012:

1) Budget Transparency and access to information; 2) Quality of consultations between government and domestic stakeholders; and 3) Executive’s accountability to Parliament and oversight bodies.

Progress of each criteria is as follows:

Budget Transparency and access to information

The Budget Guideline for 2012/13 was uploaded in the Ministry of Finance Website.

Executive's Budget Proposal and the Approved Budget for FY 2012/13 were posted on line

in September 2012;

Budget Execution report for FY 2011/12 for quarter 1, 2, 3 and 4 have been posted on MoF

website;

Citizens’ budget has been uploaded on MoF website as of November 14th 2012;

Annual CAG Report was published and made available online and physically by May, 2012;

Quarterly Budget Execution Reports for Q1, 2, 3, 4 available online but 2 – 3 month late;

Budget allocation to LGAs are posted on the Ministry of Finance website, however

stakeholders recommend that information should be posted in coherent manner so that

information is not mixed;

5 out of 11 MDAs Strategic Plans were posted on Websites and 3 out of 11 MDAs posted

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their Medium Term Expenditure Reports. Physical accessibility of information has improved

according to Non State Actors; however procedures for accessing information are not clear

or comprehensive;

PMORALG has updated their website in September all the LGA budget and disbursement

data for all quarters of FY 2011/12. Although this information was late but PMORALG has

explained the delays were due to the New Council Financial Reporting format; and

A letter with reference no. BA.254/307/01 dated 4th October, 2012 was issued to all

Regional Administrative Secretaries for transmission to LGAs clarifying which documents

can be publically accessed at local level. As the circular was only recently issued we can’t

yet assess if it has been implemented by LGAs. As a proxy, the group agreed to assess the

extent to which CSOs can physically access information at LGA level. Survey responses

indicate that most NSAs are managing to access information from LGAs and the situation is

somewhat improved. Reports are accessible before the full council meeting but hard copies

are difficult to secure. However, there is limited understanding among LGA officials on info

sharing and access is curtailed by bureaucracy, and negative attitudes. Councillors are not

receiving adequate information. Some districts are open whilst others are not. Procedures

and tools (e.g. websites) need to be established.

Quality of consultations between government and domestic stakeholders

To collect factual evidence that could inform the assessment a survey was sent by POPSM to 31 CSOs jointly selected with GBS Secretariat and DPs. Of these 11 responded as follows:

On the Quality of consultations/dialogue between government and domestic stakeholders, positive developments have been reported. Out the 11 respondents 9 responded to the 3 questions. On the 2 first questions (adequate advance notice and circulation of the minutes), the result is qualified : while the majority (6/9) reported progress in the transparency of the process (circulation of the minutes); 50% of consulted CSO’s still consider not receiving either an invitation letter, or the supporting documents, insufficient for making a meaningful contribution;

On the other hand, progress has been made by the GoT if we consider the result of the 3rd question of the survey on the quality of dialogue. The receptiveness by the Government (7/9 CSOs considered their inputs and recommendations were duly considered).

Executive’s accountability to Parliament and Oversight bodies 1) During the period from January-August 2012 a total of 1,172 questions were received by the

parliamentary office for Government responses.

639 Principal questions and 1,533 supplementary questions were asked and responded by

the government.

2) 69 direct questions and 48 supplementary questions were directed to the Prime Minister and

responded in a session of direct questions to the PM every Thursday. During this

Parliamentary session, various Bills were tabled for discussion and Approved to become

State Laws.

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The Anti-Money Laundering (Amendments) Act, No. 1/ 2012 The Constitutional Review Amendment Act, No. 2/2012 The Business Laws (Miscellaneous Amendments) Act, 2012 (No.3 of 2012) The Tanzania Livestock Research Institute Act, 2012 (No.4 of 2012) The Social Security Laws (Amendments) Act, 2012 (No.5 of 2012) The Written Laws (Miscellaneous Amendments) (No.2) Act, 2012 (No.6 of 2012)

3) During this period, various reports on the implementation of Government commitment were

submitted in the Parliament.

The Annual Report and Audited Accounts of fair competition commission for the financial year 2009/2010 The Mid-Year Review of Monetary Policy Statement of the Bank of Tanzania for the Year 2011/2012 The Annual Performance Evaluation Report of Public Procurement Regulatory Authority for the Financial Year 2010/2011 The report of the Controller and Auditor General on Performance Audit on the Management of the Government Vehicles Management The report of the Controller and Auditor General on performance audit on the management of water distribution in urban areas The report of the Controller and Auditor General on performance audit on the management of forest harvesting The Report of the Controller and Auditor General on performance audit in the management of outsourced revenue collection functions by the Local Government Authorities in Tanzania The Annual Report and Audited Accounts on the Activities of the Open University of Tanzania for the Financial Year 2009/2010 The Annual Report of Energy and Water Utilities Regulatory Authority for the year ended 30th June, 2011 The Annual Report and Audited Accounts of Tanzania Tobacco Board for the Financial Year ended 30th June, 2010 The Annual report of the National Board of Accountants and Auditors Tanzania for the year 2010/2011 The assessment of the Accountable Governance Underlying Process in year 2010 and 2011 was conducted by Independent Consultants and thereafter discussed at stakeholders meeting and agreed on final assessment. Due to time constraints the independent assessment could not be conducted and therefore Government and DPs agreed to conduct a survey to CSOs at least on criteria regarding physical accessibility of information. Although the survey was conducted, not much information was collected.

4. ANTI-CORRUPTION – SATISFACTORY

The assessment of the Underlying Process was based on three key areas including:

1. Domestication of the UNCAC/NACSAP;

GGCU/

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2. Progress on outstanding and agreed targets and results: PAF 2011; and

3. Accountability including quality of dialogue and stakeholder consultations

throughout the year including information sharing, timeliness and relevance.

Domestication of the UNCAC/NACSAP

The National Anti-corruption Strategy and Action Plan II was implemented from 2008 –

2011. Upon its completion in early 2012 the GoT commissioned the evaluation of the

NACSAP II so as to assess the impact and recommend the design of NACSAP III. The

Evaluation was completed and Final report submitted on the 10/09/2012. Consultation

was adequate and dissemination/publication included to all invitees to stakeholders

meeting. Discussion of the Final Revised report took place at the National Steering

Committee also attended the Stakeholders meeting and endorsed the

recommendations of the evaluation report. The NACSAP II Steering Committee met

once on 23/08/2012 to discuss the evaluation. Steering Committee attended the

stakeholders Financial reporting of NACSAP II programme confirms that Tshs.

218,247,191,978/= had been allocated to all MDAs for FY 2010/11. Furthermore the

NACSAP II UNDP Project for the whole period disbursed total of Tshs. 1,790,442,179.

Progress on outstanding and agreed targets and results: PAF 2011

Various meetings have been held with Bank of Tanzania regarding implementation

Progress on non-litigious elements of the EPA Action Plan. An updated written report

was received on the 11/9/12 setting out progress on EPA Action Plan. Overall

progress in BoT’s divesting of non-core functions (Credit Guarantee etc.) and

generally, taking a cumulative assessment – many of the 18-odd recommendations

have now been implemented wholly or in part (although progress has been limited

during the current review period). Key outstanding areas relate to the reconciliation of

the EPA account itself delayed because of Technical Assistance problems and

amendment to the BoT Act. Progress of Grand Corruption cases were provided on a

report submitted on the 30/4/2012 and 6/5/2012.

Progress of the 3 pieces of legislation was received on 15/11/12: The key elements of

this report are summarised below:

A) Public Leadership Code of Ethics Act

During the period under review the following has been done:

- On 6/03/2012 Cabinet memorandum regarding its amendment was discussed by

government approval system;

- On 10/03/2012 the Memorandum was returned to Ethics Secretariat, with

comments on areas for improvement including the necessity to involve all

stakeholders in order to get their views on the specific areas for review and take

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them into consideration where appropriate;

- On 1/10/2012 a Stakeholders workshop was held to enable stakeholders to give

their views;

- From 3/10-15/10/2012 Stakeholders comments were incorporated;

- A final refined and revised draft of the Cabinet memorandum was returned to

government for approval on 13/11/2012.

Next Steps:

- The Cabinet memorandum is expected to be discussed and approved before the

end of December, 2012;

- The reviewed Act is expected to be tabled before Parliament for enactment during

its sitting in April, 2013.”

B) Whistleblowers Act:

AG Chambers have identified key stakeholders to be involved in the law to be

enacted –undertaken in mid-October, 2012;

Next Steps:

Conduct a Stakeholders workshop to collect views on the scope of the proposed

Act. Activity to be undertaken by AG Chambers early December 2012;

Preparation of a Cabinet Memorandum to be completed by early January, 2013.

Submission of the Cabinet Memorandum through government approval systems for

scrutiny and approval by March, 2013.

Proposed Act tabled in Parliament for first reading by April, 2013.

C) Right to Information Legislation

Tanzania is a member of the Open Government Partnership initiative of which

enactment of a Freedom of Information act is mandatory and a criteria for eligibility to

membership. Therefore, work on preparation for its enactment is underway. The

responsible ministry is searching for best practice from countries which have enacted

the law.

Next Steps:

Identification of countries which have enacted freedom of information law with a

view to learn from them by December, 2012;

Revisit a number of global legislation related to the freedom and access to

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information through archives and internet to update on issues related to the law by

December, 2012;

Engage Public information officers as prospective implementers of the Act by

December, 2012;

Prepare a Cabinet Memorandum for its enactment and pass it through the

government approval system;

Plan is to have the law enacted by the end of this financial year.

3. Accountability including quality of dialogue and stakeholder consultations throughout

the year including information sharing, timeliness and relevance.

Three High-level anti-corruption meetings were held between GBS Troika Heads of

Mission/Cooperation and Government representative. Informal discussions also took

place in July 2012 during the Troika Plus Meeting. High Level Meetings were Chaired

by the Minister for Finance and well attended with informed contributions and

productive dialogue. Since NACSAP II ended on December 2011, the annul

Anticorruption Forum was not held, however Stakeholders meeting was held on the

24/9/2012 to discuss the evaluation of NACSAP II and recommendation for design of

NACSAP III.

5. MACROECONOMIC STABILITY – SATISFACTORY

The Government of Tanzania remains committed to policies that will sustain macroeconomic stability while promoting accelerated economic growth and poverty reduction. These goals are being successfully pursued under the economic and financial program supported by the PSI and the SCF arrangement. Policies have remained broadly on track. As of end-June 2012 all assessment/performance criteria and structural benchmarks were met. For end-September 2012 all quantitative indicative targets were met with the exception of a small shortfall for tax revenues. It was noted that a grant element of 34.68 percent of the US$920 million gas pipeline loan, contracted in November 2012, was computed using a calculator from the Commonwealth Secretariat debt management reporting system rather than the IMF loan calculator. It was on this basis that decisions were made in good faith. Fund staff has advised that the resulting grant element using the program methodology is 33 percent, below the required 35 percent. This caused non-observance of the continuous external non-concessional debt ceiling performance/assessment criterion for which a waiver is requested. All structural benchmarks through end December 2012 are largely on track except for a delay in preparation of a cost of service study for the power utility TANESCO and implementation of its findings, and preparation of a report on Tanzania’s macroeconomic management of the new gas economy. We request that these benchmarks be reset (see MEFP) to allow us sufficient time for their completion. Economic activity has remained robust, and projected GDP growth of 6.5 –7.0 percent in 2012 (6.7 percent in 2012/13) is likely to be achieved. Real GDP growth reached 7

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percent in the first half of 2012 compared with 6.6 percent in the corresponding period of 2011. This positive performance was broad based—it was especially strong in transport and communications, financial intermediation, trade and repairs, and manufacturing. The overall inflation rate has receded from a peak of 19.8 percent in the year ending December 2011 to 12.9 percent in October 2012 following improved food supply and slowdown in the increase of fuel prices. Headline inflation is projected to continue easing in the months to come, and return to single digits by end-June 2013. The Government is pursuing continued fiscal consolidation in 2012/13 to progressively rebuild fiscal buffers after responding to the last global recession with counter-cyclical fiscal policies. The budget aims to reduce the overall fiscal deficit to 5½ percent of GDP in 2012/13, down from the 6 percent of GDP average for the past three years. Over the medium-term, further deficit reduction to debt-stabilizing levels is targeted. Tanzania’s current account deficit in 2012/13 is projected to record a deficit of 16 percent of GDP and decline in the next years as domestic gas powered electricity generation leads to lower demand for imported petroleum fuels.

6. EFFECTIVE PER DIALOGUE – SATISFACTORY

The PER workshop took place in July. Key agreements: 1) the Champions group would

be chaired by PS MoF (or his representative, not the Minister) and would include some

external representation (Academia, Private Sector and maybe CSOs; 2) There would

be a PER Main Consultative meeting at the beginning of May to feed into the budget

preparation process; 3) The PER process would report to the Champions group not the

Troika, although it would inform the Troika of progress; 4) The Champions Group

committed to meeting more regularly at the beginning of the process. The meeting

agreed four areas for immediate attention.

• Tax exemptions

• Agriculture subsidies and vouchers

• Public Expenditure Tracking Survey (probably in relation to district level

expenditure/transfers)

• PPPs

The Champions group reviewed terms of reference for all 4 studies in October.

Comments across each ToR will be incorporated, budget included, and circulated to

the Champions group to finalise by 11 October. The Champions group will meet again

in the first week on December. Each of the 4 studies should aim to be completed by

mid - February to feed into the next budget.

1). TOR on Agricultural inputs Subsidies/ Vouchers - preparation was jointly

undertaken by the team comprising officials from Government side led by Ministry of

Agriculture and DPs’ side members led by World Bank. According to the presentation,

the justification of the study is the fact that the Government of Tanzania and the World

Bank have heavily invested over TSh.330 billion in input subsidies over the last eight

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years, and roughly 85 percent of the investment has been in National Agricultural Input

Voucher System (NAIVS). It is thus rational to conduct an expenditure review of the

NAIVS in its entirety to assess whether there has been value for money for the inputs

support programme, and whether there is a strong enough justification for continuation

of the programme after getting evidence of economic gains. Further, the review will

assess how the programme has contributed to increased production, productivity and

profitability of the Tanzanian farmer, the sustainability of these investments, and the

options for scaling up the programme to cover a much larger farming population in the

country. The study is expected to use two approaches. First step would involve a

detailed PER study focusing only on the NAIVS to be undertaken collaboratively by

REPOA, MAFC and World Bank; and the second step would involve a broader

summary assessment of all input subsidy programmes that would utilize the results

from the more detailed NAIVS PER study, as well as the findings from additional

analysis of other input subsidy programmes (including support to livestock and crops

not covered under NAIVS).After the presentation, a point was added about the

substantive work already done in terms of impact analysis on NAIVS, although the

study in the context of PER is still highly required. Furthermore, there were concerns

about other critical issues in the Agriculture sector including questions whether inputs

reach the beneficiaries, sustainability of inputs voucher scheme, and moving to

electronic voucher system. Other concerns were about rural roads and markets in

connection with improving agricultural productivity. Another concern was while looking

critically at agricultural inputs, export taxes on agricultural products or ad-hoc export

bans could be another dimension to analyse because it has a bearing on the whole

question of promoting production in agricultural sector. The TOR team responded that

they will work in collaboration with the Ministry of Agriculture to take the concerns into

consideration, but bearing in mind that there is time constraint and the fact that the

study is supposed to be well focused. In concluding the discussion in this area, the

chairperson elaborated the issue of crop export bans. He said that there are no more

restrictions for producers to sell their crops only to NFSR, giving example of Rukwa

farmers who recently refused to sell their crops to NFSR, and they have been allowed

to sell their products elsewhere. He said such bans were short term attempts to

stabilize food shortages during disaster times in the country whereby around 750,000

metric tons of food have been mobilized, despite having agricultural subsidies for about

eight years. Therefore, he emphasized the study should be forward looking to ensure

food security now and in the future, including more strategies for farmers to exit from

worse to better poverty levels. It was finally agreed that, generally the TOR for this

topic are clear, but need to be sharpened enough to make study more focused in the

context of PER. So, the drafting team should continue to improve the TOR and share

with Champion group before the actual work begins.

2).TOR on Managing Tax Exemptions. The study will look at the Costs and Benefits

of Tax Incentives in Tanzania. The justification is the seemingly high level of tax

incentives and tax allowances in Tanzania. Tanzania is currently in the high range in

102

Sub- Saharan Africa in terms of the fiscal cost of such practices (estimated at 2-3% of

GDP for indirect taxes and overall 5-6% of GDP- IMF report of April 2011 and ADB

report of 2010). Despite efforts to reduce the number of exemptions, new exemptions

are invariably introduced each year. The CAG report (covering fiscal year 2010/11)

found exemptions to be 18% of the total tax collection and recommended a decrease

from this level. Even with the high estimated costs of the tax incentives in Tanzania

since the early 1990s, there has been no comprehensive study to assess the costs and

benefits of these incentives and their contribution to Government’s development goals.

The study is aimed at facilitating policy and decisions making process in the country by

providing reliable information on the cost and benefits of tax exemptions as well as

best practices which could have been adopted to achieve better tax incentives recipe

that would minimize unnecessary losses of revenue as a result of the application of tax

incentives. To do this, the study will among others, focus on the following aspects:

i. Review the current situation of both fiscal and non-fiscal incentives

provided in Tanzania (Mainland) and the transparency of the processes.

ii. Analyse and estimate the distribution and magnitude of tax incentives by

main category of beneficiaries.

iii. Briefly review existing literature and their recommendations on

international experience with incentives. Specifically, the study will

review evidence relating to both the advantages and disadvantages of

incentives, the costs in terms of revenue losses and their gains in terms

of contribution to attracting foreign investment.

iv. Assess the cost and benefits of tax incentives to Tanzania for a time

period to be agreed. A suggestion is to have 1995 as a base year (prior

to introduction of VAT) include 2000 as middle year and then assess

yearly from 2005 to 2012. This gives 10 data points in time.

v. Assess, to the extent possible, the benefits and costs by sector,

beneficiary and commodity.

vi. Benchmark the level of Tanzania’s performance in incentives with EAC

partners and two other selected successful emerging countries to

determine whether Tanzania’s experience is in line with best practice.

vii. Make recommendations that will help to improve revenue collections

and reduce the level of tax incentives in Tanzania, including engaging

the stakeholders in the proposed interventions. Recommendations will

be specific to each type of incentive and will spell out possible changes

to the legal framework underpinning these incentives.

The TOR team further proposed that the study be undertaken by a highly experienced

international Economist in this area, who would be assisted by two local senior

economists, two interns and a high level political tax consultant. After the presentation,

the members were generally comfortable with the TOR, although they suggested

further sharpening of the same to be more focused in the context of PER studies. The

only issue of concern was the so called ‘’high level political tax consultant’’ and criteria

103

to get that person. It was clarified that, the political experience is crucial since normally

exemptions have political influence and interests. An option discussed was exploring

experience of a retired Minister for Finance, or Pay Master General in Tanzania, Africa

(West Africa, Sub-Saharan Africa or countries like Mauritius). It was agreed that, this

issue will be worked out in the course of implementation. Finally in this area, the

drafting team was directed to improve and finalize the TOR and share with Champion

group before the actual work begins.

3) PER TOR on Public Private Partnerships (PPPs). The core focus of the TOR Is to

identify key priorities, identify gaps, develop budget and sources of financing, agree on

administrative arrangements etc. The study is expected to borrow from ongoing

interventions including the Five Years Development Plan, PPP Strategy and

Guidelines. After the presentation, members had concerns that the TOR seems like

focusing on improving institutional arrangements because they are process oriented,

not analytical since it lacks technical questions as opposed to impact and future looking

studies that are envisaged in the PER and or research context. Both the chair and co-

chair made it clear that the study should look at the extent to which PPPs can help to

provide financial window for public budget, i.e. looking at public expenditure

components or programmes that can leverage funds from the private sector. In this

regard, there is a need to come up with a critical list of projects in the public

expenditure that could be financed under PPP arrangement. It was suggested that as a

starting point, two sectors of Transport and Power may be a focus for this study. While

strengthening institutional structures is vital in coordination of PPPs, it was suggested

this to be dealt with in a separate arrangement and the study be focused in the context

of PER. Finally in this area, the drafting team was directed to be very specific with

study, re-work and finalize the TOR and share with Champion group before the actual

work begins.

4). PER TOR on Public Expenditure Trucking studies (PETs). The work is behind

schedule because there is a debate on whether the PETs should be narrowed to

specific sectors or look at the overall transfers and flow of funds to LGAs. According to

the presentation, the initial thinking is that the study could shed light on PFM

challenges at local government levels with the objective of improving PFM as an

enabler for quality service delivery. In order to ensure a focused study with

concrete/practical examples, these PFM challenges will be explored through a

sector(s) lens – probably looking at Education and Health as the biggest spenders.

However, the challenges themselves will mostly be generic/systemic and thus

applicable to other sectors. The PETS will provide recommendations to assist in

improving PFM at both central and local government levels. After the presentation, the

chairperson emphasized that the spirit of PETs is normally tracing every shilling from

the first point of departure/disbursement to the last point and ascertain whether it has

reached the beneficiaries, spent on the intended activities and resulted to a desired

output or outcome. It may also be looked at another dimension of public expenditure by

104

analyzing areas where funds are not allocated when it was actually supposed to be

(i.e. critical areas for multidimensional issues that are somehow not addressed in the

public expenditure). Finally in this area, the drafting team was directed to be specific on

the study, re-work and finalize the TOR and share with Champion group before the

actual work begins.

The secretariat reported that there is a balance of USD 389,099.24 in the PER basket

account. It was agreed that the TOR be finalized and presented with draft budget

estimates for each study. The Secretariat will then compile the information and advise

on whether the studies be financed on individual arrangements or using the PER

basket fund, taking into account time constraints in approval and procurement

procedures.

Status of the PER work program since the last Champions group meeting held on 1st

October 2012. Also included are the required actions in order to proceed with

implementing the work program.

(i) Agriculture input subsidy study; and

(ii) Tax exemptions study

Status: The terms of reference (ToRs) for the two studies have been revised, taking

into account comments received from the last Champions group meeting and are

attached. Required action: Champions group approval of revised ToRs and guidance

on funding so that implementation of the studies can effectively commence. Note that

REPOA is already doing the assessment work of the NAIVS and the PER work will be

an extension to the ongoing work; so the only pending issue for this study to proceed is

budget for the extension work which is estimated at US$68,465. For the Tax study,

pending is the approval of the ToRs, initiate implementation of the work and guidance

on funding sources of this study, which is estimated at 133,750 USD. The findings from

the two studies are expected to feed into the 2013/14 budget preparation, and so

prompt implementation is required.

(iii) Public Private Partnerships (PPP)/Public Investment Management (PIM)

study

Status: The terms of reference (ToRs) for both PPPs study and PIM study have also

been developed taking into account the guidance received from the last Champions

group meeting. However, attached for now are the ToRs for the PPP work while PIM

ToRs will be circulated later. The PPP ToRs include the study on how to use effectively

public funds to leverage private funds in transport and energy sectors as well as

needed operational and capacity building activities for effective operation of PPP in

Tanzania.

105

Required action: Champions group review (including further guidance) and approval of

the ToRs, guidance on funding sources of the study/work, initiation of the

implementation of the study/work. Note that the PPP work is a medium term (3 years)

with estimated budget of US$1,410,000. The study on effective use of public funds to

leverage private funds in transport and energy sectors is estimated to consume

US$360,000.

(iv) Public Expenditure Tracking Surveys (PETs) in LGA study

Status: The terms of reference are yet to be prepared but initial thinking has been

developed.

Required action: Further guidance from the Champions group on the focus and scope

of the PETs study so that preparation of the ToRs can commence. The secretariat

needs to coordinate the responsible government institutions and DPs to jointly develop

the ToRs as was done with other studies.

7. PUBLIC FINANCIAL REFORM - SATISFACTORY

The assessment of PFM was organised under five Key Results areas (KRAs) relating

to: (i) Revenue management (ii) Budget and planning (iii) Budget execution,

transparency and accountability (iv) Budget control and oversight and (v) Change

management, programme monitoring and communication.

The joint assessment concluded that PFM reforms are making tangible progress. In

regard to the PAF 2012 assessments, PFM as an underlying process has been rated

as satisfactory with 90% achievement. Three of four assigned KPAs were not achieved

although work has been initiated on all KPAs and progress will continue to be followed

under the M&E framework. Three of the five PFM RP outcome indicators were

achieved while targets were not met for the remaining two.

The PFMRP IV M&E framework includes 160 detailed milestones. The majority of

these were found to be broadly on track where “on track” is defined as an activity that

is planned and in process or that is considered achievable based on the deadline

established in the M&E. A small number have already been achieved; others are

considered to be at risk, in need of revision or delayed.

MOF

106

OUTCOME INDICATORS

CLUSTER I

Outcome Indicator Baseline 2011 Target 2012 Target

2013

Target

2014

1. Head count ratio for basic needs poverty

line by rural/urban (Mkukuta II) (MOF-

NBS)

Improvement towards

2015 MKUKUTA target

including analysis of

NPS. (33.6%)

Status 2012:The poverty targets set by the Government in the MKUKUTA II and the MDG are considered for information (not for

rating). Review this element by recording

Baseline 2007 MKUKUTA II 2015 MDG 2015, by

a) National average 33.6% 24.0% 19.3%

b) Rural areas 37.6% 26.4% 20.4%

NOT ASSESSED

2. Growth of Value of Agricultural Exports

(US $ million)6 (MAFS)

905 991 1,078 1,166

Status 2012: 1132 USD

ACHIEVED

3. Flow of Private Funds into the

Agricultural Sector (Tsh Billion) (MAFS)

691 741 847 957

Status 2012:Tsh. 995 Billion

ACHIEVED

4. Proportion of villages with land use

plans (MLHS)

8 15 22 31

6 Revised forecast using actual figures instead of previous forecasted data

107

Status 2012: 12%

NOT ACHIEVED

5. Time (days) taken by Registrar of Titles

to approve a transfer of certificate of

right of occupancy (MLHS)

7 7 6 4

Status 2012: 7 days

ACHIEVED

6. Total electricity installed Capacity (MW)

(MEM)

1,220 MW

1,400 MW 1,730 MW

2,300 MW

Status 2012: 1438.24 MW

ACHIEVED

7. * % population with access to electricity

(MEM)

14.7% 16.5% 17% 17.5%

Status 2012:

NOT ASSESSED

8. Plant Availability (%) (MEM) 60% 70% 80% 85%

Status 2012: 60%

NOT ACHIEVED

9. % of Trunk and Regional Roads Network

in Good and Fair Condition (MOW)

91% 91% 92% 93%

Status 2012: 85%

NOT ACHIEVED

10. % of rural roads that are passable (good

and fair conditions) (MOW/PMORALG)

56% 58% 61% 63%

Status 2012: 59%

ACHIEVED

108

11. Time Taken for Container from

offloading until clearing from port (MOT)

11 days 9 days 7 days 5 days

Status 2012: 9 days

ACHIEVED

CLUSTER II


2013

Target

2014

1a Standard VII exam pass rate

93. National average for the

previous year, disaggregated by

gender (MoEVT)

A: Baseline 2011:

53.5% (M=59.0%;

F=48.3%)

55%

60.2%

62.1%

Status 2012: A: 2011 Exams: Average: 55% Actual Results: 2011 Exams: Average = 58.3% (M= 62.5%; F= 54.5%)

ACHIEVED

1b B. Proportion of councils in which less

than 40 % of Standard VII pupils passed

the PSLE in the previous year (MoEVT)

B: 12.1%

9%

12.5%

11.7%

Status 2012: B: 2011 Exams: 9% Actual Results: 2011 Exams: 11.4%

NOT ACHIEVED

2. Form 4 examination pass rates

(Division I-III) national average for the

previous year, disaggregated by gender

(MoEVT)

T=11.5%

(M= 14.6%; F= 7.8%)

14% 12% 13%

Status 2012: 2011 Exams: 14% Actual Results: 2011Exams: Average = 10.0% (M= 12.13%; F= 7.13%)

NOT ACHIEVED

3. Total enrolment in Degree Programmes

(% females) (MoEVT)

121,204

(34.7% female)

124,500 127,000 130,500

109

Status 2012: 143,380 (35.2%)

ACHIEVED

4a A. Proportion of births at Health

facilities, national average

A: Baseline 2010

58.4%

60%

65%

70%

Status 2012: A: 63%

ACHIEVED

4b

B. Proportion of districts in which at

least 60% of births take place at health

facilities (MoHSW)

B: Baseline 2010

54%

55%

60%

65%

Status 2012: B: 55%

ACHIEVED

5. Persons with advanced HIV disease

(CD4<200 or <350) currently receiving

ARV combination treatment

(disaggregated under 15 and over 15

and by sex) (MoHSW)

Baseline 2010

384,816

362,570

404,788

459,594

Status 2012: Under 15 years: 42,837

Above 15 years: 496,537

ACHIEVED

6. Nurses and Nurse midwives per 10,000

population by region (MoHSW)

Baseline 2010

3.96

4.0

4.4

5

Status 2012: 3.0% (3 per 10,000 people)

NOT ACHIEVED BUT POSITIVE TRAJECTORY

7. Total number of enrolment in health

institutes (MoHSW)

Baseline 2011 7,475 8,325 9,000

110

6,713 (101%) 75% 83% 90%

Status 2012: 7,458 (75%)

ACHIEVED

8 Proportion of households in rural

settlements with access to clean and

safe water from improved/protected

sources (MOWI)

Baseline 2010: 57.8% 60.5% 62.1% 63.6%

Status 2012: 56.6%

NOT ACHIEVED

9 Proportion of households in small towns

with access to clean and safe water from

improved/protected sources (MOWI)

Baseline 2009: 53% 54.3%

55.7% 56.3%

Status 2012: 52.5%

NOT ACHIEVED

All indicators in the water sector were not achieved due to delays In completion of Large scale Water Infrastructure

Investments, while the population is continuing to increase. Furthermore there were challenges with the M & E system.

10 Proportion of households in Regional

urban centers with access to clean and

safe water from improved/protected

sources (MOWI)

Baseline 2010: 86% 89.6% 91.4% 93.2%

Status 2012: 81%

NOT ACHIEVED


Investments, while the population is continuing to increase. Furthermore there were challenges with the M & E system

11 Proportion of households in Dar es

Salaam with access to clean and safe

water from improved/protected sources

(MOWI)

Baseline 2010: 55% 60% 67% 71%

Status 2012: 51%

NOT ACHIEVED

111


Investments, while the population is continuing to increase. Furthermore there were challenges with the M & E system.

CLUSTER III


2013

Target

2014

1. Percentage number of cases pending for

two or more years (MOCAJ)

14% 13% 12%

Status: 13%

ACHIEVED

2. Citizen Satisfaction with Service delivery

in LGAs.(PMORALG)

LGAs 54%

Status: POPSM have commissioned Citizen Satisfaction Survey on MDAs services. The Survey results for MDAs are looking

positive, however the survey could not be used to assess the situation for LGA level.

NOT ASSESSED

3. % of Under Five children receiving birth

certificates (MOCAJ)

Baseline from DHS

2010

6.2%

8%

11%

14%

Status 2012 : 4th June - 13th July, RITA piloted a new registration process in14 wards in Temeke DSM. This pilot used a new process for registration which reduced the number of forms, the process of registration (health facilities and officers of the LGAs), scanning and mobile up-loading of data. The results of this pilot were significant and increased the volume of registration. Next Steps: the RITA team is currently planning to take the new system, with the lessons learned from Temeke, to 5 new regions (Geita, Shinyanga, Simiyu, Mwanza and Mbeya). Mbeya likely next. This scale up will be costly and funding requests has been made and expectations of GoT budget for RITA as the under 5 registration receives stronger recognition as part of the current priorities within overall civil registration systems. NOT ACHIEVED

4. Joint commitment to develop anti-

corruption OI with agreed milestones in

PAF 2013

NOT ASSESSED

112

CLUSTER IV


2013

Target

2014

1. Average level of compliance of:

i) All audited procuring entities and;

ii) The top 20 procuring entities with the

(revised) Procurement Act 2010. (MOF-

PPRA)

(63%+75%)/2=68% i) 75%

ii) Baseline(BL) (New

set of indicators)

BL+5% of

baseline

BL+10%

of baseline

Status 2012: 74%

ACHIEVED

2. Non-salary (OC-DEV) funds released to

RAS and LGAs by end Q3, as

percentage of the Resources Available7

(OC+DEV) for the year. (MOF-BUDGET)

42.1% 60%

(Prel actual = 60.1%)

65% 70%

Status 2012:60.1%

ACHIEVED

3. Reduction in outstanding audit matters

(MOF-ACGEN)

Central: Tshs. 362026

millions.

Local: Tshs. 5515

million.

Central: Tshs.

8,076,574,791

Local: Tshs.

5,668,730,107

ii) Targets for 2013 and

2014 TBD by June

2012.

Status 2012: Central: Tshs. 8,076,574,791; Local: Tshs. 5,668,730,107

Improved performance and reduction in value of last year’s baseline at central and local levels in outstanding matters.

For the Financial year 2010/2011, Payments made without supporting documents for the Central Government

operations have been reduced to Tshs.8,076,574,791 as compared to 2009/2010. This is an improvement for the

Central Government also trends show that Central Government have significant improvement in performance as

unqualified opinions have increased from 71% in 2009/2010 to 85% in 2010/2011 and qualified opinions have

7 “Resources available” is equivalent to final allocated budget at the end of the year which takes into account adjustments, such as necessary expenditure cuts

and reallocations within the year.

113

decreased from 26% in 2009/2010 to 15% in 2010/2011 and no adverse opinion. While payments without supporting

documents for LGAs have increased to Tshs.5,668,730,107 in 2010/2011 as compared to last financial year 2009/2010.

Trends in the LGAs show that unqualified opinions have increased from 49% in 2009/2010 to 54% in 2010/2011 and

qualified opinions have decreased from 64% in 2009/2010 to 56% in 2010/2011 and adverse opinions have increased

by 1%, that is from 3% in 2009/2010 to 4% in 2010/2011. Trends indicate an improvement in LGA’s performance as

compared to 2009/2010.

NOT ACHIEVED

4 Approved budget broadly in line with

policy objectives (MKUKUTA, 5YDP,

sector policy priorities) (MOF-BUDGET)

75% 75% 75% 75%

Status 2012: 75%

ACHIEVED

5 Share of total actual expenditure on

education, health, water, agriculture,

road, and energy sectors in total

government spending excluding

interest. (MOF-BUDGET)

57.7% 58.7% (prel actual=

59.2%)

59.7% 60.7%

Status 2012: 59.2%

ACHIEVED

6 Domestic tax revenue + non-tax revenue

as a share of GDP (MOF-PAD)

16.3% 17.6% (prel actual =

17.56%)

17.8% 18%

Status 2012: 17.56%

ACHIEVED

7 Value of tax exemptions as a share of

GDP (MOF-PAD)

2.2% 1.9% 1.6% 1.2%

Status 2012: Value of tax exemptions as a share of GDP was declining from 4.2% in 2006/07 to a minimum of 2.2% in 2009/10. The

magnitude of exemptions started to grow up again, rejuvenating to a level of 3% in 2011/12. The revival was attributed by

reinstatement of the deemed capital goods, reinstatement of exemptions to mining companies with MDAs, exemptions on fuel for

emergence power plants operations.

NOT ACHIEVED

DONOR PAF 2012

114

OUTCOME INDICATOR Baseline

2011

Target

2012

Target

2013

Target

2014

1. % of Budget Support disbursed within the first quarter of the GoT

fiscal year.

17% 55% 60% 65%

Status 2012: 68%

ACHIEVED

2. % of budget support disbursed at the latest during the quarter

indicated in the disbursement schedule agreed with GoT at the time

of confirmation of commitment.

98% 98% 98% 98%

Status 2012: 100%

ACHIEVED

115

ANNEX 15

PERFOMANCE ASSESMENT FRAMEWORK 2013

KEY POLICY ACTIONS (assessment criteria annexed)

CLUSTER 1 Lead

Implement intermodal transport measures to ease movement of goods to & from Dar es Salaam Port

2013: - Increases pre-arrival lodgment system and cargo manifest reported into the ASYCUDA (Automated System

for Customs Data) system to 95%.

- Start implementing the action Plan Matrix for strategies for TPA to move to a landlord status

- RAHCO/TRL investment programme and business plan approved by GoT.

- Procurement for central line spot improvements and rolling stock purchases commenced.

2014: - Port Community System fully operational.

- Reliable rail transport service restored: TRL cargo volumes to/from DSM port increased by 10 percent

- Improving road access to DSM Port identified

MoT

Formulation of energy subsidy policy by September 2013

2013: Energy subsidy policy proposal completed by MEM by September 2013. (Additional milestones to be

agreed based on World Bank Energy Loan Negotiations by February 2013, if not agreed roll over to PAF

2014)

2014: New energy subsidy policy in place by October 2014

MEM

Put in place integrated land management information system in Northern and Eastern zones

2013: Complete the final 10% of the geodetic network and consolidation of all relevant information from all 6

sectors’ registries

2014: Integrated land management information system in Eastern and Northern Zones fully functioning with

digitalized records, and trained staff using the new system

MoLHS

D

CLUSTER 3

Tanzania validated as an EITI compliant country MEM

116

2013: 1) Tanzania is validated as an EITI-compliant country; (2) Domestic legislation institutionalizing EITI and

establishing an enabling framework for EITI’s operation is drafted and completes stakeholder consultation by

October 2013.

2014: (1) Bill of legislation institutionalizing EITI and establishing an enabling framework for EITI’s operation

presented to Parliament (2) Tanzania publishes annual Tanzania EITI report approved by the International EITI

Secretariat by Oct 2014

Implement key recommendations from the case flow analysis and roll out of case/work flow reforms

2013: Roll out the key non-policy recommendations emanating from Case Analysis Report to the following courts:

High Court Bukoba, High Court Dodoma, High Court Labour division and RMs Court Kisutu

MoCLA

Implement the pay and incentives strategy

2013: Pay and incentives scheme incorporated into Budget 2013/14

POPSM

CLUSTER 4

Interface central and local government ICT with technical control and new software acquisition and all new

software developed becomes centrally coordinated

2013: Costed action plan for ICT integration interfacing is completed and approved by June 2013. This target date

may shift once the inception report is available

2014: Subsequent targets to be extracted from the approved action plan

MoF /

PMO-

RALG

Streamline and rationalize national systems and processes for intergovernmental transfers to LGAs

2013: Comprehensive and sequenced two year work plan, including a time bound M&E framework with defined

roles and responsibilities to address shortcomings of the systems and processes of intergovernmental transfers

finalized by June 2013. This target may have to shift to a later date based on the inception report

2014: Key actions from the work plan implemented as per the M&E framework

MoF/

PMO-

RLG

Increase budget transparency and public access to key fiscal information

2013: Based on the new budget cycle for FY2013/14, the Government ensures publication of the budget with: (i)

guidelines for the preparation of the annual plan and budget for 2013/14 published on Ministry of Finance website

by December 2012; (ii) the executive budget proposal [volumes I-IV] as submitted to the Parliament published on

the Ministry of Finance website June, 2013; (iii) the approved budget [all volumes] published on Ministry of

Finance website by September, 2013; (iv) and citizens’ budget published by November, 2013; and (v) Budget

Execution Report (year-end report) preliminary budget out turn published on Government of Tanzania websites by

November, 2013

MoF

The Government enhances domestic tax revenue (tax and non-tax) mobilization with better transparency and

business environment

2013: i) Submission of a Bill to Parliament to enact Tax Administration Act for the purpose of establishing a

common tax procedure among different taxes collected by Tanzania Revenue Authority by end-April 2013

ii) Study on Non-Tax Revenue – “Integration and Harmonization of Revenue Collection Systems” in place by

November 2013, and action plan to follow-up on recommendations by June 2014

iii) Submission of a new VAT Bill in line with best practice to Parliament by end-April 2013

MoF

117

The Government to strengthen institutions of public investment management to ensure that public

investments are selected based on proper economic and financial assessments

2013: The Government (a) drafts a bill to amend the Planning Commission Act, and (b) develops a public

investment operational manual to provide guidance for the ministries, departments and agencies (MDAs), and local

government authorities (LGAs), to carry out economic and financial analysis of public investment projects"

POPC

The Government to strengthen institutions of public private partnerships (PPP) to ensure that PPP projects

are selected based on proper economic and financial assessments

2013: The Minister for Finance approves PPP finance regulations on government support and unsolicited bids by

June. Establish operational PPP facilitation fund.

MoF

118

Cluster 1 Outcome Indicators Baseline 2011 Target 2013 Target 2014 Target 2015

1. Head count ratio for basic

needs poverty line by

rural/urban (Mkukuta II)

(MOF-NBS)

33.6% (HBS 2007) Joint monitoring

of poverty

reduction with the

help of HBS and

NPS trends

8

2. Growth of value of

agricultural exports (US $

million)9 (MAFS)

905 1,078 1,166

3. The amount of lending to the

agriculture sector by

domestic banks (Tshs Billion)

691 1083 1347

4. Food self-sufficiency ratio

(MAFS)

111 113 114

5. Proportion of villages with

land use plans (MLHS)

8 15 18

6. Time taken by registrar of

titles to approve a transfer of

certificate of right of

7 6 4

8 Mkukuta and Mkuza target for basic needs poverty line by 2015 is 20%

9 Revised forecast using actual figures instead of previous forecasted data

119

occupancy (MLHS)

7. Total electricity installed

capacity (MW) (MEM)

1,220 MW

1,730 MW

2,300 MW

8. % of the population with

access to electricity (MEM)

14.7% 17% 17.5%

9. Plant availability (%) (MEM) 60% 80% 85%

10. % of trunk and regional

roads network in good and

fair condition (MOW)

85% 87% 89%

11. % of rural roads that are

passable (good and fair

conditions)

(MOW/PMORALG)

59% 61% 63%

12. Container dwell time 9 (Baseline 2012) 7 5

13. Ship turnaround time

(container)

8 (Baseline 2012) 4.3 4

14. Implementation of natural

resources decentralization to

districts and communities

120

a) Declared village land forest

reserves

b) Signed joint management

agreements

c) Authorized associations

among wildlife management

areas

d) Registered beach

management units

473

180

17

47

523

200

20

75

583

240

23

110

640

300

26

150

Cluster 2 Outcome Indicators Baseline 2011 Target 2013 Target 2014 Target 2015

1a Staffing for delivery of basic

services at LGA level reduced

number of districts with

primary school PTR ≥ 50

47

out of 133 districts

30

out of 160 districts

25

out of 160

districts

15

out of 160

districts

1b Reduced number of districts

with nurses/midwives <=

3/10,000 population

Baseline 2012: 55% 48% 41% 34%

2. Standard VII exam pass rate

A. National average for the

previous year, disaggregated

by gender (MoEVT)

B. Proportion of councils in

which less than 40 % of

Standard VII pupils passed

Baseline 2011: 53.5%

(M=59.0%; F=48.3%)

Baseline 2011: 12.1%

60.2%

12.5%

62.1%

11.7%

121

the PSLE in the previous year

(MoEVT)

3. Form 4 examination pass

rates (Division I-III) national

average for the previous year,

disaggregated by gender

(MoEVT)

T = 11.5%

(M= 14.6%; F= 7.8%)

12% 13%

4. Total enrolment in Degree

Programmes (% females)

(MoEVT)

121,204

(34.7% female)

127,000 130,500

5. A. Proportion of births at

Health facilities, national

average

B. Proportion of districts in

which at least 60% of births

take place at health facilities

(MoHSW)

Baseline 2010 = 58.4%

Baseline 2010 = 54%

65%

60%

70%

65%

72%

67%

6. Persons with advanced HIV

disease (CD4<200 or <350)

currently receiving ARV

combination treatment

(disaggregated under 15 and

over 15 and by sex)

Baseline 2010 =

384,816

404,788

459,594

500,000

122

(MoHSW)

7. Proportion of councils in

which at least 8 out of 10

tracer medicines are available

at Primary Health Care

facilities (dispensary and

health centres).

Baseline 2012 = 47.0%

59.3%

66.6%

74.1%

8. Total number of enrolment in

health institutes (MoHSW)

Baseline 2011 = 6,713

(101%)

8,325 9,000 10,000

9. Proportion of households in

rural settlements with access

to clean and safe water from

improved/protected sources

(MOWI)

Baseline 2010 = 57.8%

62.1%

63.6%

65%


small towns with access to

clean and safe water from


(MOWI)

Baseline 2010 = 53%

55.7%

56.3%

57%


regional urban centers with

access to clean and safe water

from improved/protected

Baseline 2010 = 86%

91.4%

93.2%

95%

123

sources (MOWI)


Dar es Salaam with access to

clean and safe water from


(MOWI)

Baseline 2010 = 55%

67%

71%

75%

Cluster 3 Outcome Indicator Baseline 2011 Target 2013 Target 2014 Target 2015

1. Percentage number of cases

pending for two or more

years (MOCLA)

14% 12.5% 12% 11.5%

2. % of Under Five children

receiving birth certificates

(MOCLA)

Baseline from DHS

2010

6.2%

11%

14%

3. Score in Control of

Corruption Indicator (one of

World Bank Worldwide

Governance Indicators)

-0.52 Positive trend.

Agree way

forward on

developing ‘home

grown’ indicator.

4. Joint commitment to continue

work on a consistent

methodology to measure

Citizen’s Satisfaction with

124

Service delivery for PAF 2014

Cluster 4 Outcome Indicator Baseline 2011 Target 2013 Target 2014 Target 2015

1. Average level of compliance

of:

The top 20 procuring entities

with the (revised)

Procurement Act 2010.

(MOF-PPRA)

67.7% BL+5% of

baseline (71.1%)

BL+10% of

baseline

(74.5%)

2. Non-salary (OC-DEV) funds

released to RAS and LGAs by

end Q3, as percentage of the

Resources Available10

(OC+DEV) for the year.

(MOF-BUDGET)

46.5%

[FY 2010/11]

65% 70%

3. Reduction in outstanding

audit matters (MOF-NAO)

Targets to be confirmed

by March 2013

Tbc Tbc

4 Approved budget broadly in

line with policy objectives

(MKUKUTA, 5YDP, sector

policy priorities) (MOF-

BUDGET)

75% 75% 75%

10 “Resources available” is equivalent to final allocated budget at the end of the year which takes into account adjustments, such as necessary expenditure cuts and reallocations within the year.

125

5 Share of total actual

expenditure on education,

health, water, agriculture,

road, and energy sectors in

total government spending

excluding interest. (MOF-

BUDGET)

57.7% 59.7% 60.7%

6 Domestic tax revenue + non-

tax revenue as a share of GDP

(MOF-BUDGET)

16.3% 17.8% 18%

7 Value of tax exemptions as a

share of GDP (MOF-PAD)

2.2% 1.6% 1.2%

DONOR PAF 2013

DP OUTCOME INDICATORS Baseline 2011 Target 2013 Target 2014 Target 2015

1. % of Budget Support disbursed

within the first quarter of the

GoT fiscal year.

17% 60% 65% 65%

2. % of budget support disbursed

at the latest during the quarter

indicated in the disbursement

schedule agreed with GoT at the

time of confirmation of

98% 100% 100% 100%

126

commitment.

Note: All Underlying Processes to be removed based on finalisation of Joint assessment of underlying principles process.

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